Interest Rate Options

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Dictionary Says

Definition of 'Interest Rate Options'

An investment tool whose payoff depends on the future level of interest rates. Interest rate options are both exchange traded and over-the-counter instruments.
Investopedia Says

Investopedia explains 'Interest Rate Options'

Interest rate options from exchanges in the United States are offered on Treasury bond futures, Treasury note futures and eurodollar futures. An investor taking a long position in interest rate call options believes that interest rates will rise, while an investor taking a position in interest rate put options believes that interest rates will fall.
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'Interest Rate Options'

  • CFA Level 1 Study Guide - Derivatives - Interest Rate Options vs. ...

    http://www.investopedia.com/exam-guide/cfa-level-1/derivatives/interest-rate-options-versus-fras-forward-rate-agreements.asp
    Learn the differences between interest rate options and forward rate agreements.
    Sample payoff calculations of an interest rate option. ...

  • Immunization Inoculates Against Interest Rate Risk

    http://www.investopedia.com/articles/financial-theory/09/bond-interest-rate-immunization.asp
    ... between assets and liabilities = Bond principal or payment e = Interest rate risk
    PV ... Bonds with embedded options tend to be more volatile, which makes duration ...

  • Using Interest Rate Parity To Trade Forex

    http://www.investopedia.com/articles/forex/08/interes-rate-parity.asp
    ... Assume that the interest rate for borrowing funds for a one ... and that the one-year
    deposit rate in Country ... Currency A = Currency B). SEE: Using Options Tools To ...

  • How do companies benefit from interest rate and currency swaps?

    http://www.investopedia.com/ask/answers/06/benefitsofswaps.asp
    ... Active Trading; Forex; Personal Finance; Real Estate; Retirement; Insurance; ETFs;
    Options/Futures; ... How do companies benefit from interest rate and currency swaps ...

  • Do long-term bonds have a greater interest rate risk than short ...

    http://www.investopedia.com/ask/answers/05/ltbondrisk.asp
    ... Do long-term bonds have a greater interest rate risk than short-term bonds?
    The answer to this question lies in the fixed income ...

  • How Interest Rates Affect The Stock Market

    http://www.investopedia.com/articles/06/interestaffectsmarket.asp
    ... one can never say with confidence that an interest rate hike by ... Forces Behind Interest
    Rates and Dividends, Interest Rates And Their Effect on Stock Options ...

  • How Interest Rates Affect The US Markets

    http://www.investopedia.com/articles/stocks/09/how-interest-rates-affect-markets.asp
    ... and Bond Markets Investors have a wide variety of investment options. When comparing
    the average dividend yield on a blue-chip stock to the interest rate on a ...

  • Dividends, Interest Rates And Their Effect On Stock Options

    http://www.investopedia.com/articles/optioninvestor/03/121003.asp
    ... Different models were developed to accurately price American-style options. ... interest
    rates in their calculations using a risk-free interest rate such as US ...

  • Floating-Rate Mutual Funds: Rewards And Risks

    http://www.investopedia.com/articles/mutualfund/10/floating-rate-mutual-funds.asp
    ... Some of the loans can be originated with options, like interest rate floors, which
    can affect the interest rate risk involved with owning the loan. ...

  • Trading Around Key Options Indicators

    http://www.investopedia.com/articles/optioninvestor/12/trading-around-key-option-indicators.asp
    ... The TED spread is the interest rate differential between the LIBOR and the US
    T-Bill rate; it is an ... indicators that can be used by options traders; the ...

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