Q

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 of the underlying to which exposure is sought. The name refers to the variable notional principal of these products which reflects the fact that the face amount of currency coverage they contain rises or falls to cover changes in the foreign currency value of the underlying. An example is a EUR/USD option with a payout in Japanese Yen embedded in a Japanese yen deposit. See currency protected.

Quantize
To give a derivative quanto features. See currency protected.

Quanto Option
An option in which the payoff is the greater of zero or the value of a Quanto Forward contract.

Quanto Swap
A swap in which the underlying price is quantity adjusted, as with the Quanto Forward and Quanto Option.

Quick ratio
Indicator of a company’s financial strength (or weakness). Calculated by taking current assets less inventories, divided by current liabilities. This ratio provides information regarding the firm’s liquidity and ability to meet its obligations. Also called the Acid Test ratio.

Quotation
The bid and offered prices a dealer is willing to buy or sell at.