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 ?
Monthly interest options are available for all of Nationwide's Fixed Rate Bonds, e-Bonds and Fixed Rate ISAs.
under certain conditions, a combination of both the principal and interest options (the Combination Option).
Zurich's new survivorship life policy, Zurich Survivor Index Universal Life, is designed to jointly insure two individuals while providing index-linked interest options and flexible premiums.
It offers savers the choice of up to three interest options.
In addition, the website is fully equipped with an advanced advertisement banner management system for online digital advertisement campaigns and programs, offered by Methaq to its partners having different demographic, segments and Interest options to reach a wide range of online targets audience.
Mr Rice said the financial package included a high degree of flexibility, not only in that funds would be drawn when required, but also in terms of interest options and capital repayments.
All of nationwide's fixed rate bonds and e-bonds also have monthly interest options available.
The pricing of interest options presents significant challenges to market practitioners.
The company offered economic interest options and, in many cases, cash bonuses to 37 developers of the open source JBoss(R) application server based on contributions to the project in 2002 and earlier.
The facility provides for prime or LIBOR rate interest options at IXC's election.
The facility has a five-year term and provides for prime or LIBOR rate interest options at IXC's election.