Interest rate option: Difference between revisions
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imported>Doug Williamson m (Category added 9/10/13) |
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(IRO). | (IRO). | ||
An option relating to interest rates. | An option relating to interest rates. | ||
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More commonly in practice the option is cash-settled based on the difference between the option strike rate and the current market rate. | More commonly in practice the option is cash-settled based on the difference between the option strike rate and the current market rate. | ||
== See also == | == See also == | ||
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* [[Interest rate guarantee]] | * [[Interest rate guarantee]] | ||
* [[Option]] | * [[Option]] | ||
[[Category:Manage_risks]] | |||
Latest revision as of 13:53, 9 October 2013
(IRO).
An option relating to interest rates.
Historically this was the right but not the obligation to borrow/lend a specified amount at a specified rate for a specified period.
More commonly in practice the option is cash-settled based on the difference between the option strike rate and the current market rate.
