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capped option

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Financial Dictionary

Capped Option

An option with a pre-established profit cap. A capped option is automatically exercised when the underlying security closes at or above (for a call) or at or below (for a put) the Option's cap price.

Investopedia Commentary

This can also be referred to as a capped-style option.

Related Links

Options Basics Tutorial

See also: Call, Index Option, LEAPS, Options contract, Put, Strike price

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