Time for a timer

Time for a timer

Timer options are derivatives whose maturity is random. They come in perpetual and finite-maturity versions. For perpetual timer options, the expiry is the random future time at which the asset’s accumulated variance first hits a certain level. For finite-maturity timer options, a maximum maturity is specified in the contract, so that exercise can only take place before or at a contractual expiry time. Recently, these contracts have become popular in the equities market – after being introduced