Floortion

Filed Under: ,
Dictionary Says

Definition of 'Floortion'


A type of option that gives the holder the right, but not the obligation, to purchase or sell an interest rate floor at a specific price during a predetermined period of time. A floortion combines the benefits of both an interest rate floor and an option. The only upfront cost to the holder is the premium the holder has to pay to purchase the option.

Investopedia Says

Investopedia explains 'Floortion'


The investor who buys the right to enter into an interest rate floor will receive a payoff when the interest rate on the underlying floating-rate note falls below a certain level. If the floating rate does not fall below a certain rate, then the investor can exercise his or her right to not purchase the interest rate floor at the premium.

comments powered by Disqus
Hot Definitions
  1. Valuation

    The process of determining the current worth of an asset or company. There are many techniques that can be used to determine value, some are subjective and others are objective.
  2. Valuation

    The process of determining the current worth of an asset or company. There are many techniques that can be used to determine value, some are subjective and others are objective.
  3. Tech Street

    A term used in the financial markets and the press to refer to the technology sector. Companies like Intel, Microsoft, Apple and Dell are all considered to be part of Tech Street.
  4. Tech Street

    A term used in the financial markets and the press to refer to the technology sector. Companies like Intel, Microsoft, Apple and Dell are all considered to be part of Tech Street.
  5. Momentum Investing

    An investment strategy that aims to capitalize on the continuance of existing trends in the market. The momentum investor believes that large increases in the price of a security will be followed by additional gains and vice versa for declining values.
  6. Momentum Investing

    An investment strategy that aims to capitalize on the continuance of existing trends in the market. The momentum investor believes that large increases in the price of a security will be followed by additional gains and vice versa for declining values.
Trading Center