Dictionary > Finance > A > Average Price Call Option

# Finance Dictionary - A Terms

# Average Price Call Option

The payoff of average price call option ¼ max [0, A(T) K], where A(T) is the arithmetic average of stock price over time and K is the strike price. This implies that the payoff of this option is either equal to zero or larger than zero. In other words, the amount of payoff is equal to the difference between A(T) and K.