Investments, tenth edition

   Asian Options 

 You already have been introduced to American- and European-style options. Asian-style 

options are options with payoffs that depend on the  average  price of the underlying asset 

during at least some portion of the life of the option. For example, an Asian call option may 

have a payoff equal to the average stock price over the last 3 months minus the strike price 

if that value is positive, and zero otherwise. These options may be of interest, for example, 

to firms that wish to hedge a profit stream that depends on the average price of a commod-

ity over some period of time.