Cliquet option

Each option is struck at-the-money when it becomes active.

[2] A cliquet is, therefore, a series of at-the-money options but where the total premium is determined in advance.

A cliquet can be thought of as a series of "pre-purchased" at-the-money options.

The payout on each option can either be paid at the final maturity, or at the end of each reset period.

[3] A three-year cliquet with reset dates each year would have three payoffs.