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The ratio of the dollar price change in the price of an option to a 1% change in the expected price volatility.
Knockin Option
An option that “comes to life” when a trigger event occurs. Typically when a price crosses a particular barrier it pulls the trigger.
Knockout Option
An option that “dies” when a trigger event occurs. Typically when a price crosses a particular barrier it pulls the trigger.
An option implicit in another instrument. The commonest are: call options embedded in bonds, which allow the issuer to redeem the bond early; the options implicit in bonds with sinking funds; the embedded put provisions […]
Quality option Also called the swap option, the seller’s choice of deliverables in Treasury Bond and Treasury note futures contract. Quanto A currency-protected derivative product that is, one denominated in a currency other than that […]
January Effect A recurring trend in the stock market during the month of January (mostly the first half of the month) wherein stock prices tend to go up. Jamming Executing a large sell (buy) order […]
