Bond option

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Bond option

An option to buy or sell a bond by a particular date at a fixed price.

Bond Option

An option to buy or sell (depending on whether it is a call or a put) a bond at a certain price on or before the expiry date. One buys a call bond option if one believes that interest rates will fall, causing an increase in bond prices. Likewise, one buys a put bond option if one believes that the opposite will be the case. See also: Stock option.
References in periodicals archive ?
Friday's expiration of April Treasury bond options, she said, did not add any volatility to the session.
Morgan's Flow Business remarked: "Driven by client demand, the product has expanded rapidly this year to include European strips and bond options.
Galmiche joins Paribas from CS First Boston in New York where he was a Director and Head of the Arbitrage and Bond Options Desk, and more recently, a senior member of the Propriety Trading Group.