Liquidity swap and Outright: Difference between pages
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imported>Doug Williamson (Create page. Source: FCA webpage https://www.fca.org.uk/publication/guidance-consultation/gc11_18.pdf) |
imported>Doug Williamson (Reference outright expressly.) |
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In relation to derivative financial instruments, an outright is one which commits both parties to the contracted exchange at maturity. | |||
Examples include forward foreign exchange contracts, and forward rate agreements. | |||
Outright instruments are contrasted with options. | |||
Under an option, one of the parties has a choice about whether to make the exchange at maturity, and will only do so if it is in their interests to do so at the time, based on prevailing market prices. | |||
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[[ | == See also == | ||
* [[Derivative instrument]] | |||
* [[Forward foreign exchange contract]] | |||
* [[Option]] | |||
Revision as of 14:12, 21 May 2015
In relation to derivative financial instruments, an outright is one which commits both parties to the contracted exchange at maturity.
Examples include forward foreign exchange contracts, and forward rate agreements.
Outright instruments are contrasted with options.
Under an option, one of the parties has a choice about whether to make the exchange at maturity, and will only do so if it is in their interests to do so at the time, based on prevailing market prices.
