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Interest Rate Option
(redirected from Interest rate options)

   Also found in: Wikipedia 0.01 sec.
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.


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Mentioned in?  References in periodicals archive?   Financial browser?   Full browser?
 
  Some popular types of options: stock options, bond options, index options, interest rate options, commodity options, and currency options.
Other Interest Rate Options Although a fixed rate home equity loan affords predictable monthly payments, homeowners also have the option of an adjustable rate home equity loan.
According to the International Swaps and Derivatives Association, by the end of 2006 the outstanding value of interest rate swaps, currency swaps and interest rate options had reached $286,000 billion (about six times global gross product), up from a mere $3,450 billion in 1990.
 
 
 
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