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Structural Leverage

Broadly speaking, it is the use of leverage in the structure of an investment. It is a structural component of...

Leveraged CDS

A credit default swap (CDS) in which the underlying is a syndicated secured loan rather than corporate or sovereign bonds,...

Call Leverage

An option leverage that measures the sensitivity of a call option’s price to changes in the underlying price. In other...

Derivatives and Leverage

In general, leverage (or gearing) can be defined as borrowing funds to make investments. In the context of derivatives trading,...

Thunderball

A hybrid derivative structure in which the coupon is determined as the difference between the previous coupon and a predefined...

Flow Derivative

A “leveraged” securitized product offering that is designed to provide maximum leverage with respect to currency denominations of a set...

Turbo Certificate

A structured product (structured certificate) that provides leverage (gearing), both upside and downside, so that every incremental movement in the...

Capitalization Ratio

A financial ratio that relates total debt to total capitalization (capital structure). It tells about how much the company is...

Non-Recourse Leverage

The leverage in which the so-called non-recourse borrowing is used. It is not backed by collateral posted by the borrower....

Homemade Arbitrage

The leverage which an individual investor can obtain by borrowing and lending on the same terms as firms. To do...