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Definition of 'Embedded Option'
An option that is an inseparable part of another instrument. Compare this to a normal (or bare) option, which trades separately from the underlying security.
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Investopedia explains 'Embedded Option'
A common embedded option is the call provision in most corporate bonds.
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Discover the world of options, from primary concepts to how options work and why you might use them.
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PPNs guarantee to return at least 100% of the original investment and have the potential to return much more.
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