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embedded option

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Embedded Option
An option that is an inseparable part of another instrument. Compare this to a normal (or bare) option, which trades separately from the underlying security.

Notes:
A common embedded option is the call provision in most corporate bonds.

Embedded option
An option that is part of the structure of a bond that gives either the bondholder or the issuer the right to take some action against the other party, as opposed to a bare option, which trades separately from any underlying security.
embedded option
A provision within a security giving either the issuer or the security holder the right to take a specified action against the other. For example, a call provision is an embedded option in a bond that gives the issuer the right to redeem the bond prior to the scheduled maturity.
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If the sponsor's share price rises, options behave more like the underlying stock, rising and falling in value in tandem with the shares, prompting managers to become more risk averse and more desirous to preserve an embedded option gain.
Consider all options for options by Stewart, Bennett / Chief Executive (U.S.)
Wireless Authentication Now Available Through Versona Embedded Option
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Non-GAAP net income adjusts net income for amortization of acquisition related intangibles, share based compensation, acquisition-related expenses, capitalized loan fee amortization, and embedded option mark-to-market expense/convertible debt accretion, all net after tax.
Epiq Systems, Inc. Announces First Quarter 2006 Results with 50% ... by Business Wire
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