# Lookback Option

*Derivatives & Options — Finicade finance glossary*

A lookback option pays off against the best price reached over its life rather than the price at expiry — perfect hindsight, at a price.

An option that pays off against the best price reached over its life, not the price at expiry — so a call settles against the lowest low, letting you 'buy at the bottom' in hindsight. That perfect hindsight makes it expensive.

**Related terms:** [Exotic Option](https://finicade.com/glossary/exotic-options), [Asian Option](https://finicade.com/glossary/asian-option), [Path Dependence](https://finicade.com/glossary/path-dependence)

Source: https://finicade.com/glossary/lookback-option