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Forward Backwardation

A situation of backwardation in which a specific period is “squeezed”, i.e., characterized by forced, not normal, trading. This usually...

Barrier Swaption

A swaption which activates or comes into life when the swap coupon crosses a threshold level or “barrier”. It comes...

Collateral Valuation Adjustment

It is part of xVA (cross valuation adjustments); it refers to the pricing adjustment made for a collateralized derivative. It...

Forward Intrinsic Value

An option value that includes, in addition to the intrinsic value, the fair value of the forward underlying the option...

Option Time Value

Also known as extrinsic or instrumental value, it is the portion left of the option value (the price) when its...

Options on Physicals

Option contracts which are written not on derivative instruments and equity assets such as futures, stocks, or indexes, but otherwise...

Short Option

A short position in an option whereby the position holder has the right, but not the obligation, to trade an...

Option-Dated Forward

A forward exchange contract which gives the buyer the right to choose when to exchange currencies between two preset dates....

OAS

It stands for option-adjusted spread; the credit spread that is added over the spot rates (the Treasury spot rate curve,...

Option-Adjusted Spread

The credit spread that is added over the spot rates (the Treasury spot rate curve, the LIBOR rate curve, etc)...