August 7th, 2014, 1:06 pm
An investor usually finds the price of a plain vanilla call option costs too much. So up-out option can be used if the investor finds the underlying price cannot go too high. Alternatively, the bank can sell a call and buy a down-in put from the investor to reduce the total cost. I can only figure out these two methods to reduce option price. Is there more strategies to reduce the price and generally accepted by investor?Any suggestions are appreciated.