64 Results for Tag: underlying

Knock-Out Option

Knock-Out Option What is a 'Knock-Out Option' A knock-out option is an option with a built-in mechanism to expire worthless if a specified price level is exceeded. A knock-out option sets

Yield-Based Option

Yield-Based Option What is 'Yield-Based Option' A type of debt-instrument-based option that derives its value from the difference between the exercise price and the value of the yield of t

Intrinsic Value

Intrinsic Value In the market of finance, the term intrinsic value can have two distinct meanings: Intrinsic value, is the difference between the strike price of the option and the underlyi

Implied Repo Rate

DefinitionImplied Repo Rate is the rate of return of borrowing money to buy an asset in the spot market and delivering it in the futures market where the notional is used to repay the loan.

Implied Volatility (IV)

Implied Volatility (IV) What is 'Implied Volatility - IV' Implied volatility is the estimated volatility of a security's price. In general, implied volatility increases when the market is

Naked Put

DefinitionA naked put is a put option where the option writer does not have sufficient liquidity to cover the contracts in case of assignment. No amount of underlying stock will satisfy assi

Naked Warrant

Naked Warrant What is 'Naked Warrant' A warrant that is issued without a host bond. A naked warrant allows the holder to buy or sell a particular financial instrument, such as a bond or sh

Rainbow Option

DefinitionRainbow option is a derivative exposed to two or more sources of uncertainty, as opposed to a simple option that is exposed to one source of uncertainty, such as the price of under


DefinitionNormal backwardation, also sometimes called backwardation, is the market condition wherein the price of a commodities' forward or futures contract is trading below the expected spo

Binary Option

DefinitionA binary option is a financial option in which the payoff is either some fixed monetary amount or nothing at all. The two main types of binary options are the cash-or-nothing binar
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