What is Average Price Option?

Legal Definition
A COMPLEX OPTION that grants the buyer a payoff equal to the difference between an average price on an UNDERLYING market reference and a predefined STRIKE PRICE. See also ASIAN OPTION, AVERAGE STRIKE OPTION.AVERAGE STRIKE OPTION A COMPLEX OPTION that grants the A25 buyer a payoff equal to the difference between an average STRIKE PRICE and the terminal value of the UNDERLYING market reference. See also ASIAN OPTION, AVERAGE PRICE OPTION.AVERAGE UP A strategy of buying additional securities at increasing prices, thereby raising the average cost of the entire position. See also AVERAGE DOWN.