[key-puh
t, kap-uht] 
[kap-i-tuh] . Anatomy. | any head or headlike expansion on a structure, as on a bone. |
Caput
A type of exotic option that consists of a call option on a put option. Essentially it gives the holder the right to purchase another option. This type of option is also known as a "compound option".
Investopedia Commentary
The holder of a caput option has the right to purchase a specific put option in the event that the price of the underlying asset declines. The disadvantage of a caput option is that it only trades over-the-counter, so it is not as easy to get into a position with caput options as with regular vanilla options.
Related Links
Options Basics Tutorial
See also: Call Option, Compound Option, Exotic Option, Over The Counter, Vanilla Option
caput cap·ut (kāp'&oobreve;t, -ət)
n. pl. cap·i·ta (kāp'ĭ-tə)
The head.