Investopedia

Continue to Site »

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.

Articles Of Interest

  1.

    Options Basics Tutorial

    Discover the world of options, from primary concepts to how options work and why you might use them.

  2. What Investors Should Know About Interest Rates

    Understanding interest rates helps you answer the fundamental question of where to put your money.

  3. Forces Behind Interest Rates

    Get a deeper understanding of the importance of interest rates and what makes them change.

  4. Who determines interest rates?

    In countries using a centralized banking model, interest rates are determined by the central bank. In the first step of interest rate determination, the government's economic observers create ...

  5. Making It Big On Wall Street

    Read about some of the most glamorous Wall Street jobs and what it takes to land one.

  6. Quants: The Rocket Scientists Of Wall Street

    Blend math, finance and computer skills to command a high - and well deserved - salary.

  7. Uncovering Oil And Gas Futures

    Find out how to stay on top of data reports that could cause volatility in oil and gas markets.

  8. Trading Is Timing

    Learn how to make gains even if you don't get in at the right time.

  9. Build A Baby Berkshire

    Get a piece of Warren Buffett's profit by using Form 13F to coattail his picks.

  10. Leading Economic Indicators Predict Market Trends

    Leading indicators help investors to predict and react to where the market is headed.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Cost-Push Inflation

    A phenomenon in which the general price levels rise (inflation) due to increases in the cost of wages and raw materials.

  2. Happiness Economics

    The formal academic study of the relationship between individual satisfaction and economic issues, such as employment and wealth.

  3. Affluenza

    A social condition arising from the desire to be more wealthy, successful or to "keep up with the Joneses." Affluenza is symptomatic of a culture that holds up financial success as one of the highest achievements.

  4. Icarus Factor

    The term Icarus factor describes a situation where managers or executives initiate an overly ambitious project which then fails. Fueled by excitement for the project, the executives are unable to reign in their misguided enthusiasm before it is too late to avoid the failure.

  5. Angelina Jolie Stock Index

    An index made up of a selection of stocks from companies associated with actress Angela Jolie.

  6. Consequential Loss

    The amount of loss incurred as a result of being unable to use business property or equipment.
Trading Center