Deferred Payment Option
What is a Deferred Payment Option?
How Does a Deferred Payment Option Work?
A deferred payment option operates no differently from a standard vanilla option contract with the exception that payment, should the holder choose to exercise the option, will not be received until the expiration date. For instance, if a deferred payment option has an expiration date of 31 December and the holder chooses to exercise on 1 November, he will not receive the proceeds until 31 December.