Power option
= Power option
{title2=$S_T^p$}
A power option is a <European contingent claim> whose payoff is a fixed power of the terminal underlying price. In the <Black-Scholes model>, its value is $S_t^p\exp((p-1)r(T-t)+\frac12p(p-1)\sigma^2(T-t))$ when the required <moments> are finite.