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Default Risk

Generally speaking, it is the possibility that firms or individuals would fail to honor their contractual obligations on their borrowed...

MAB Option

An abbreviation for moving average barrier option; a barrier option which has a regular European option payoff, but is triggered...

Moving Average Barrier Option

A barrier option which has a regular European option payoff, but is triggered when the moving average underlying price breaches/...

MABO

An abbreviation for moving average barrier option; a barrier option which has a regular European option payoff, but is triggered...

Married Put

An option strategy (also a covered put) whereby an investor, holding a long position in stock, purchases a put on...

Credit Spread Put Option

A credit spread option which gives the holder the right, but not the obligation, to sell a defaultable reference bond...

Coupon

The amount of interest paid annually on a bond or note expressed as a percentage of its face or par...

Credit Default Insurance

The use of financial instruments to eliminate or mitigate credit and default risks posed by borrowers or issuers of debt...

Credit Derivative

A negotiable contract between two parties (bilateral always) that allows them to manage their credit risk by using a derivative...

Calendar Strangle

An option trading strategy (specifically a calendar spread) which is constructed by buying a far-expiration-month strangle and simultaneously selling a...