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Relative Delta

The dollar sensitivity of the price of a derivative to a fractional change in the price of the underlying. It...

Single-Name CDS

A type of credit default swap (CDS) where there is only one reference entity. The reference entity is usually a...

Floating Rate Note

Also a floater. It is a note bearing a variable interest rate which is usually readjusted every six months. This...

Floating-Strike Asian Option

An option (Asian option) whose payoff depends on the average price of the underlying asset during the life of the...

Basket Option

A family of options whose underlying is a basket of assets, commodities, securities, currencies, etc. This multivariate option (warrant) is...

Knock-In Risk Reversal

An equity risk reversal which has one or more knock-in option components. The premium received from the sale of a...

STRIPE

Abbreviation for swap transferring risk with participating element; a hedging tool that combines an interest rate swap with a participating...

FRN

It stands for floating rate note. It is a note bearing a variable interest rate which is usually readjusted every...

Naked Option Strategy

An unhedged option strategy which exclusively follows one of two basic strategies: short call (selling or writing call options) and...

Caput

An exotic option (also called compound option) in which a call option is made on a put option, whereby giving...