A credit default swap (CDS) or credit swap is defined as a swap entered into by two counterparties, a buyer...

A long straddle is a straddle whereby two options (a call and a put) are simultaneously purchased on the same...

A deferred capped call is a capped call whose payoff is not received instantaneously by the option holder, but rather...

A long floor is a floor held by the purchaser (the long) against payment of the floor premium to the...

A swap is, so to speak, equivalent to a strip of back-to-back forwards (FRAs) or futures. Forwards or futures allow...

A stack hedge is a hedging technique and a front load hedge which involves concentrating most of the futures contracts...

A forward rate agreement (FRA) is an effective tool to apply a preset interest rate (known as the FRA rate)...

A warrant is a security, issued by a company (such as a financial institution), giving the holder the right to...

Writing naked options (selling naked options) is usually subject to initial margin requirements. The initial margin that is required by...

A credit derivative is a negotiable contract between two parties (bilateral always) that allows them to manage their credit risk...