Cliquet Option

Business, Legal & Accounting Glossary

Definition: Cliquet Option


Cliquet Option


Full Definition of Cliquet Option


A type of option in which the strike price periodically resets before the final expiration date is reached. When the resetting date is reached, the option will expire worthless if the current price of the security is below the strike price, and the strike price will reset to this lower security price. If the resetting date is reached and the security is trading higher than the strike price, the investor will earn the difference and the strike price will reset to the higher security price. For example, a two-year cliquet stock option that resets annually could have a strike price of $500. If the annual resetting date is reached and the stock is trading at $600, the investor receives a $100 payout and the strike price resets to $600. The name “cliquet” refers to the imaginary clicking sound made when the strike price is reset to a higher level. also called ratchet option.


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Cliquet Option. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. November 29, 2021 https://payrollheaven.com/define/cliquet-option/.
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Cliquet Option. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/cliquet-option/ (accessed: November 29, 2021).
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Cliquet Option. PayrollHeaven.com. Retrieved November 29, 2021, from PayrollHeaven.com website: https://payrollheaven.com/define/cliquet-option/

Definition Sources


Definitions for Cliquet Option are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 20th November, 2021 | 0 Views.