Rainbow curved and located high above the Sun (or Moon) with its convex side pointing downwards (creating the impression of an "upside down rainbow"); the circumhorizontal arc runs much closer to the horizon, is more straight and located at a significant distance below the Sun (or Moon). Both arcs have their red side pointing towards the sun and their violet part away from it, meaning the circumzenithal arc is red on the bottom, while the circumhorizontal arc is red on top. The circumhorizontal arc is sometimes referred to by the misnomer "fire rainbow". In order to view it, the Sun or
Rainbow option Rainbow option Rainbow option is a derivative exposed to two or more sources of uncertainty, as opposed to a simple option that is exposed to one source of uncertainty, such as the price of underlying asset. The name of rainbow comes from Rubinstein (1991), who emphasises that this option was based on a combination of various assets like a rainbow is a combination of various colors. More generally, rainbow options are multiasset options, also referred to as correlation options, or basket options. Rainbow can take various other forms but the combining idea is to have a payoff that is depending