Derivative – Page 4 – Fincyclopedia
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Non-Deferred Capped Call

A capped call whose payoff is received instantaneously by the option holder. The payoff is a cash amount equal to…

Noon Average Rate Contract

An average rate option or average rate forward contract which is traded in currency markets, where its underlying rate is…

Netting

The ability to offset derivative contracts with positive and negative values (the so called receivables and payables exposure) to figure…

Break Out

Re-establishing an original position taken by an option buyer, undoing whereby a previously made conversion or reversal of an option…

Knock-In Floor

A barrier floor whereby protection exists or activates only if the floating interest rate crosses the barrier (the pre-defined knock-in…

Knock-Out Cap

A barrier cap whereby protection ceases to exist or deactivates only if the floating interest rate crosses the barrier on…

Interest Rate Caption

An option on a cap. In other words, an interest rate caption is an option to buy or sell an…

Zebra Basis Risk Swap

A swap agreement made between a municipality (a city or town local council) and a financial intermediary, in which the…

Warehouse

A practice by which a swap market maker runs a book of unmatched swaps and manages the entire set of…

Variable Maturity Option

An option that expires before its stated expiration date if the underlying has made significant leaps prior to an early…