Derivatives

Lookalike Swap

July 26, 2021
Derivatives

Dividend Swap

July 27, 2021

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An over-the-counter option that is cash-settled based on the settlement price of a similar exchange-traded futures contract on a certain trading day. The underlying asset of this option is a futures contract and the value of the option is theoretically the same as the futures for the corresponding month. This is based on the underlying contract’s expected price upon expiration. Financial settlement provides protection to the writer from any unexpected exercise into futures.

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