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Derivatives




Participating Range Forward


A variant of the range forward contract which has some type of participation in the movement of the underlying below the lower or bottom strike or above the upper strike or both. The participating range forward is a step further than the participating forward. It gives the holder a perfect hedge at the lower strike, while giving room for trading at spot prices in a range above the bottom strike up to an agreed upper strike.

It is also known as a forward plus.



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Derivatives have increasingly become very important tools in finance over the last three decades. Many different types of derivatives are now traded actively on ...
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