Is an OTC-traded financial instrument that facilitates an option to buy or sell a particular bond at a certain date for a particular price. It is similar to a stock option with the difference that the underlying asset is a bond. Bond options can be valued using the Black model or with a lattice based short rate model such as Black-Derman-Toy, Ho Lee or Hull–White.
Thursday, April 1, 2010
Bond Option
Is an OTC-traded financial instrument that facilitates an option to buy or sell a particular bond at a certain date for a particular price. It is similar to a stock option with the difference that the underlying asset is a bond. Bond options can be valued using the Black model or with a lattice based short rate model such as Black-Derman-Toy, Ho Lee or Hull–White.
Is an OTC-traded financial instrument that facilitates an option to buy or sell a particular bond at a certain date for a particular price. It is similar to a stock option with the difference that the underlying asset is a bond. Bond options can be valued using the Black model or with a lattice based short rate model such as Black-Derman-Toy, Ho Lee or Hull–White.
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