Business and Personal Finance Dictionary

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• SPLIT FEE OPTION
  
  An option on an option, in which the buyer makes from one to three payments. The buyer may pay a premium up front, may make a second payment (the second premium, hence the name Split Fee, also known as the first strike price) to keep the option alive, and may make a third payment (the second strike price) to exercise the final option. Also known as a Compound Option (q.v.). A special case of an Installment Option (q.v.).
  
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