Astrikeresetoptionisanoptionthatallowsitsholdertoresetthestrikepricetotheprevailingunderlyingassetpriceatamomentchosenbytheholder.Thepricingmodeloftheoptioncanbeformulatedasaparabolicvariationalinequalityandtheoptimalresetstrategyisthefreeboundary.ThesmoothnessofthefreeboundaryinsomecaseswasshowedinourarticlepublishedinJDE.Wewouldproveitssmoothnessintheothercaseinthispaperbyageneralizedcomparisonprincipleforthevariationalinequality.
