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Interest Rate Option
(redirected from Interest-Rate Option Contract)

    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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