Filter by Categories
Accounting
Banking

Derivatives




Spreadlock


A derivative contract that allows a market participant to enter into an interest rate swap (IRS) at a preset spread over treasuries, usually of identical or similar tenors. In other words, market participants can lock in current spread between an interest rate swap and an underlying bond yield. The buyer (holder) of a spreadlock is obliged to enter into the underlying swap at the maturity date of the spreadlock.

There are two principal types of spreadlocks: option-based spreadlocks (option spreadlocks) or forward-based spreadlocks (forward spreadlocks).



ABC
Derivatives have increasingly become very important tools in finance over the last three decades. Many different types of derivatives are now traded actively on ...
Watch on Youtube
Remember to read our privacy policy before submission of your comments or any suggestions. Please keep comments relevant, respectful, and as much concise as possible. By commenting you are required to follow our community guidelines.

Comments


    Leave Your Comment

    Your email address will not be published.*