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Interest Rate Caption

An option on a cap. In other words, an interest rate caption is an option to buy or sell an…

Zebra Basis Risk Swap

A swap agreement made between a municipality (a city or town local council) and a financial intermediary, in which the…

Warehouse

A practice by which a swap market maker runs a book of unmatched swaps and manages the entire set of…

Variable Maturity Option

An option that expires before its stated expiration date if the underlying has made significant leaps prior to an early…

Vanishing Option

An option that expires or pays off if the underlying hits or exceeds the outstrike price. For example, in the…

Underwater Option

Alternative term for an out of the money option. Always from buyer’s perspective, it is an option whose underlying’s market…

Xccy Forward

A forward contract which allows the holder to lock in today an exchange rate at a future date. With this…

UDI Swap

An interest rate swap in which one leg is a fixed rate referenced to the UDI index (or the Unidades…

Range Accrual Bond

A bond that pays interest only if the floating interest rate (such as LIBOR) or aninterest rate option underlying a…

Quadruple Witching Week

The week that begins on Monday prior to the Saturday expiration of any four classes of option contracts. The week…