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Bond Option |
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Bond Option An option contract in which the underlying asset is a bond. Other than the different characteristics of the underlying assets, there is no significant difference between stock and bond options. Just as with other options, a bond option allows investors the ability to hedge the risk of their bond portfolios or speculate on the direction of bond prices with limited risk. Notes: A buyer of a bond call option is expecting a decline in interest rates and an increase in bond prices. The buyer of a put bond option is expecting an increase in interest rates and a decrease in bond prices. |
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? Mentioned in | ? References in periodicals archive | ||
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| 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. |
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Bond options