interest rate option

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Interest Rate Option

An option contract giving the holder to buy (for a call) or sell (for a put) a security with a certain interest rate at a given strike price on or before the expiration date. An interest-rate option is useful to hedge the interest rate risk inherent to portfolios consisting mainly of bonds.

interest rate option

An option contract on interest-bearing securities or on a futures contract on interest-bearing securities. These options are generally used as a means to manage the risk of a bond portfolio.
References in periodicals archive ?
The Royal Bank of Scotland has today launched a new Guaranteed Equity Savings Account (GESA), linked to the growth of the FTSE 100, and a monthly interest option on its competitive 60 Day Savings and Bonus 90 accounts for customers who use them as a source of regular income.
The new products offer exceptional control: three guaranteed death benefit options; cash values may be indexed based on either one or two equity indexes or a fixed interest option, or a combination of all three.
To increase store traffic and encourage repeat business at Hank's Fine Furniture and Home Place Furniture, a full menu of special-terms promotions, including no payment and no interest option, will be available, allowing cardholders to "purchase today" and "pay tomorrow.
The terms of the new credit facility allow for a two-year interest only revolving period and five-year term period with a Prime or LIBOR interest option.
Additionally, the notes offer a contingent interest option that provides certain tax advantages to the organization.
Offering shorter surrender charge periods, the choice of three S&P 500(R) index-linked crediting options and a fixed interest option, Spectrum Rewards Choice 7 and 9 are designed to be short-term retirement savings tools.
Promotions include no interest option plans with and without payments, plus regular and reduced rate terms.
A fixed interest option with a competitive interest rate
Allianz Life Pro+ Survivor has multiple index allocation options including the S&P 500 Index, a Blended index, and the Barclays US Dynamic Balance Index as well as a fixed interest option.
50% gross/AER on its 2 year International Reserve Bond with a monthly gross interest option of 3.
Chelsea Building Society also offers a monthly interest option of 3.
Those who prefer a monthly interest option can choose to receive 3.