An option which is embedded in another derivative (or generally a financial instrument) so that an investor is allowed to enter into an offsetting position at a preset date. For instance, an exit option could be used to enable a counterparty to a swap to get out of the agreement by entering into an offsetting swap. This way, the combined structure is tantamount to a swaption on the offsetting swap.
This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.
Comments