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Definition of 'Price-Based Option'
A derivative financial instrument in which the underlying asset is a debt security. Typically, these options give their holders the right to purchase or sell an underlying debt security (usually a bond) or to receive cash payment based on the current value of the underlying debt security.
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Investopedia explains 'Price-Based Option'
This unique type of option has been traded in the past, but it is rarely traded in modern financial markets. The yield-based option is a more commonly-traded relative of the priced-based option.
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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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Learn the complex concepts and calculations for trading bonds including bond pricing, yield, term structure of interest rates and duration.
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There's one simple hurdle in the transition from stock to futures options: learning about product specifications.
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