When is an Asian option less useful than a vanilla option?
A)For reducing the incentives for price manipulation of the underlying close to maturity.
B)For making the option less sensitive to jump risk close to maturity.
C)For hedging exposure to the average price of a security.
D)For taking directional bets.

Question

Quizplus · Accepted Answer

You are better off taking a directional bet with a plain vanilla option because it is more likely to be deep-in-the-money than an Asian option,conditional on being in-the-money.

When Is an Asian Option Less Useful Than a Vanilla