Derivatives – Page 61 – Fincyclopedia

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Physical Option

An option which has a physical asset as underlying. It gives the holder the right to buy or sell a...

IV of an Option

Generally, it is the effective monetary advantage which would be obtained when an option is immediately exercised. In call options,...

Tranched Credit Derivative

A credit derivative that has a set of tranches as underlying credit. The the holder receives a spread payment in...

MOTO

It stands for mortgage over treasury option, which is, by definition, a cash-settled call that is written on the mortgage...

IIF

An abbreviation for inflation-indexed floor; an inflation derivative that pays out if inflation (as measured by percentage increase in the…

IIC

An abbreviation for inflation-indexed cap; an inflation derivative that pays out if inflation (as measured by percentage increase in the…

Implied Duration

The duration of the deliverable or underlying bond of a futures contract that is used as an estimate of the…

Remarketable Asset Swap

Also a callable asset swap. It is an asset swap in which the seller retains a call option on the...

Roth Option

A right which is offered by employers, in the US, to employees such that they can contribute after-tax funds to...

Roll-Out

An option-related strategy that is based on the replacement of a position by closing out one option with a near-month...