A type of interest rate derivative; a contract (an option) which gives the holder the right without the obligation to pay or receive a preset interest rate (called the strike) on a specific notional amount for a specific period of time. The option holder thereby has the right to lock in a future rate today. Like most options, interest rate options come in two basic forms: interest rate calls and interest rate puts.
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