Dictionary > Finance > A > Average Price Put Option

# Finance Dictionary - A Terms

# Average Price Put Option

The payoff of average price put option ¼ max [0, K A(T)], where A(T) is the arithmetic average of stock price per share 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 K and A(T).