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Indirect Hedge

A transaction that, as opposed to a direct hedge, involves hedging one commodity with a contract for a different commodity....

Proxy Hedge

A transaction that, as opposed to a direct hedge, involves hedging one commodity with a contract for a different commodity....

Dirty Hedge

A transaction that, as opposed to a direct hedge, involves hedging one commodity with a contract for a different commodity....

Dirty Hedge Instrument

A derivative instrument which cannot be perfectly hedged using available exchange-traded instruments. In other words, the risks associated with such...

Mark To Market

The practice which is used to revalue a financial instrument, in general. In the context of derivatives, marking to market...

NTM Option

It stands for near-the-money option; an option contract in which the underlying's market price is very near to the strike...

Near-The-Money Option

An option contract in which the underlying's market price is very near to the strike price. For example, a call...

Traffic Light Option

An OTC option that belongs to the class of correlation derivatives, and which represents a European-style derivative with a payoff...

NPA

It stands for notional principal amount; the nominal value that is used to calculate swap payments. For example, in an...

Notional Principal Amount

The nominal value that is used to calculate swap payments. For example, in an interest rate swap, each period's interest...