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Concave Payoff

A payoff (of some derivative instrument) whose amount is a concave function of the value of the underlying instrument. The...

ATM Forward Call Option

An at-the-money forward call option is a call with a strike price equal to the forward price of the underlying...

Delta

It has different implications in different contexts. In general, delta defines the number of units of an asset that should...

ATM Forward Put Option

An at-the-money forward put option is a put with a strike price equal to the forward price of the underlying...

Alternative Option

An option which gives its holder the right to exercise on the best or worst return earned on two or...

DOTM Elasticity

An abbreviation for deep-in-the-money elasticity; the elasticity of an option where its value doesn't respond to changes in the underlying...

Deep Out of The Money Elasticity

The elasticity of an option where its value doesn't respond to changes in the underlying price. As such, it delta...

Deep In The Money

An option is said to be deep in the money when its exercise price is significantly below (for a call...

Deep Out of The Money

The state of a derivative (swaps, options, etc.) being in a heavily losing position. In case of options, this implies...

Flat Rate Forward

A forward contract/ futures contract that has a flat/ constant contango over the course of its lifespan. Contango occurs when...