Shout option

Shout option

See deferred strike option.

Shout Option

An option contract that allows the holder the opportunity at certain points in the life of the contract to lock in a certain profit while continuing the holder the contract. For example, if a contract is in the money by $10 per share at a given time, the option holder may "shout" or lock in the profit. This means that he/she will make at least $10 per share regardless of the future price movements of the underlying asset. If the option is only $5 in the money at expiration, the holder still makes $10 per share. On the other hand, if it is in the money by $15 per share at expiration, the holder can collect the higher profit. A shout option gives a great deal of flexibility to the option holder. It is a type of exotic option.