Option – Page 80 – Fincyclopedia

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Asset-or-Nothing Option

An exotic option whose payout is equal to the value of the underlying asset if the price of the asset...

Interest Rate Collartion

An option on an interest rate collar. It gives its holder the right, without the obligation, to trade a collar...

FSG

It stands for forward shooting grid; a variant of the lattice tree methods (binomial trees/ trinomial trees) that is used...

Forward Shooting Grid

A variant of the lattice tree methods (binomial trees/ trinomial trees) that is used to price a wide stripe of...

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-Adjusted Yield

The expected yield to maturity (YTM) of a bond/ note that is adjusted for an embedded option (e.g., an issuer's...

Option-Dated Forward

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