Mid-Atlantic Option

Categories: Derivatives

A Mid-Atlantic option is an option that can be exercised at multiple time periods, rather than the boring, one-time-period for exercising toward the end of the contract.

Also referred to as the Semi-American or Bermuda option, the Mid-Atlantic option gets its name because the exercise dates are less flexible than American options to the west, and more flexible than European options to the east.

This kind of option setup can be beneficial for both the holder and writer.

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