Interest rate option: Difference between revisions
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imported>Doug Williamson m (Spacing 22/8/13) |
imported>Doug Williamson m (Category added 9/10/13) |
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* [[Interest rate guarantee]] | * [[Interest rate guarantee]] | ||
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Latest revision as of 13:53, 9 October 2013
(IRO).
An option relating to interest rates.
Historically this was the right but not the obligation to borrow/lend a specified amount at a specified rate for a specified period.
More commonly in practice the option is cash-settled based on the difference between the option strike rate and the current market rate.
