= Contingent claim payoff
{title2=$X$}
= Financial payoff
{synonym}
The monetary amount delivered by a <contingent claim> at its payment time, represented by a <random variable> measurable with respect to the information then available. For a <European call option> it is $(S_T-K)^+$, and for a <European put option> it is $(K-S_T)^+$. A payoff is the delivered amount, whereas the claim is the contract and its current price is the cost of acquiring or replicating that contract.
Back to article page
