Wild Card Option

DEFINITION of 'Wild Card Option'

An option associated with treasury bond or treasury note futures contracts that permits the short position to delay the delivery of the underlying.

BREAKING DOWN 'Wild Card Option'

This provision allows the short futures contract holder to announce his or her intention to deliver the underlying securities on any notice day before a specified time, which is later than the regular trading hours, in which invoice prices are normally fixed. The security that is delivered is usually the cheapest to deliver on that specific day.

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RELATED FAQS
  1. Will speculators buy or sell Treasury bond futures contracts if they expect interest ...

  2. Which of the following statements least accurately describes the characteristics ...

    The correct answer is: d) The fact that any number of bonds may be delivered to fulfill a futures contract is an advantage ... Read Answer >>
  3. How do the investment risks differ between options and futures?

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  4. What is a wild-card play?

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  5. Why are treasury bond yields important to investors of other securities?

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  6. What does it mean to take delivery of a derivative contract?

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