An Asian option or average option is a special type of option contract where the payoff depends on the average price of the underlying asset over a certain period of time. The payoff is different from the case of a European option or American option, where the payoff of the option contract depends on the price of the underlying stcok at exercise date.
option Asian put
A Guide for Beginners. We'll assume you're ok with this, but you can opt-out if you wish. Could you check or help me look in the right place?
When a business is concerned about the average exchange rate over time. Asian options are, however, difficult to price. This is because the geometric average of a set of lognormally distributed variables is also lognormal. Rogers and Shi solve the pricing problem with a PDE approach.