Bond option


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Bond option

An option to buy or sell a bond by a particular date at a fixed price.

Bond Option

An option to buy or sell (depending on whether it is a call or a put) a bond at a certain price on or before the expiry date. One buys a call bond option if one believes that interest rates will fall, causing an increase in bond prices. Likewise, one buys a put bond option if one believes that the opposite will be the case. See also: Stock option.
References in periodicals archive ?
8, 2006 and are due serially June 15, 2008-2027, or as a term bond option as determined by the successful bidder.
1, 2006-2020, with a term bond option, subject to optional redemption beginning Jan.
1, 2006-2025, with a term bond option, subject to optional redemption beginning Jan.
The bonds mature June 1, 2005-2022, subject to a bidder's term bond option and callable beginning in 2015.
Previously, he was Head of the OTC Bond Option desk for European currencies in CSFB's London office.
Savings Bonds by simply selecting the Savings Bond option on the company's Web site.
Friday's expiration of April Treasury bond options, she said, did not add any volatility to the session.
The majority of firms elected all six annexes covering continuity of contract, price sources, payment netting, EMU-related definitions, bond options and equity derivatives.
Morgan's Flow Business remarked: "Driven by client demand, the product has expanded rapidly this year to include European strips and bond options.
The first guarantee covers all of NWMA's foreign-exchange transactions; the second covers interest rate swaps, forward rate agreements, interest rate options, bond options, or options on any of these transactions to designated counterparties.