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.

  1. Short (or Short Position)

    A short position is the sale of a borrowed security, commodity ...
  2. Five Against Bond Spread - FAB

    A spread in the futures markets created by taking offsetting ...
  3. Cheapest to Deliver - CTD

    In a futures contract, the cheapest security that can be delivered ...
  4. Differential

    The amount of adjustment of the delivery location and grade of ...
  5. Five Against Note Spread - FAN

    A spread in the futures markets created by taking offsetting ...
  6. Cash Commodity

    In futures trading, the cash commodity is delivered for payments. ...
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  2. How do hedge funds use equity options?

    With the growth in the size and number of hedge funds over the past decade, the interest in how these funds go about generating ... Read Full Answer >>
  3. Can mutual funds invest in options and futures?

    Mutual funds invest in not only stocks and fixed-income securities but also options and futures. There exists a separate ... Read Full Answer >>
  4. Do mutual funds invest only in stocks?

    Mutual funds invest in stocks, but certain types also invest in government and corporate bonds. Stocks are subject to the ... Read Full Answer >>
  5. What is the relationship between the current yield and risk?

    The general relationship between current yield and risk is that they increase in correlation to one another. A higher current ... Read Full Answer >>
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    Traders roll over futures contracts to switch from the front month contract that is close to expiration to another contract ... Read Full Answer >>

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