Chooser option
In finance, a chooser option is a special type of option contract. It gives the purchaser a fixed period of time to decide whether the derivative will be a European call or put option.
In more detail, a chooser option has a specified decision time , where the buyer has to make the decision described above. Finally, at the expiration time
the option expires. If the buyer has chosen that it should be a call option, the payout is
. For the choice of a put option, the payout is
. Here
is the strike price of the option and
is the stock price at expiry.