Lookback

Lookback is a financial term that refers to a type of option whose payout depends on the best or worst price of an underlying asset during a specific period. Instead of settling at a single point in time, a lookback option allows the holder to "look back" over the period and choose the optimal price—such as the highest price for a call option or the lowest for a put—to maximize profits. This design provides greater flexibility and potential for better returns, but it also involves more complexity and typically higher premiums than standard options.