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Topic: Exotic interest rate option

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Interest rate cap

Interest Rate Swap

Forward starting swap

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Swaption

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Interest Rate Swap

	Types of Mortgage Loans \| Compare Home Mortgage Loan Programs \| Mortgage Lenders Plus.com
		The monthly interest rate for this 10/1 ARM is fixed for an initial term of 10 years.
		A 5/1 Jumbo ARM is an adjustable rate mortgage, or ARM, that has an initial interest rate for the first five years, and which changes annually thereafter, based on an index.
		Fixed rate mortgages are a mortgage on which the interest is set for the term of the loan.
	www.mortgage-lenders-plus.com /mortgage.asp (2450 words)

	Call option - Wikipedia, the free encyclopedia
		A call option is a financial contract between two parties, the buyer and the seller of this type of option.
		Call options can be purchased on many financial instruments other than stock in a corporation - options can be purchased on futures on interest rates, for example (see interest rate cap) - as well as on commodities such as gold or crude oil.
		An incentive stock option, the option to buy stock in a particular company, is a right granted by a corporation to a particular person (typically executives) to purchase treasury stock.
	en.wikipedia.org /wiki/Call_option (934 words)

	Interest rate derivative - Wikipedia, the free encyclopedia (Site not responding. Last check: 2007-11-04)
		An interest rate derivative is a derivative where the underlying asset is the right to pay or receive a (usually notional) amount of money at a given interest rate.
		Interest rate derivatives are the largest derivatives market in the world.
		When most companies think of hedging against rising interest rates, their real concern is mitigating the impact of rising rates on the actual dollar interest payments on outstanding loans and debt issues.
	www.sciencedaily.com /encyclopedia/exotic_interest_rate_option (444 words)

	Put option - Wikipedia, the free encyclopedia
		A put option (sometimes simply called a "put") is a financial contract between two parties, the buyer and the seller of the option.
		However, options are traded on many other assets: financial - such as interest rates (see interest rate floor) - and physical, such as gold or crude oil.
		In general, the buyer of a put option expects the price of stock to fall significantly, but does not want to sell the stock short because that could result in large losses if the stock does go up anyway.
	en.wikipedia.org /wiki/Put_option (761 words)

	Definition of Exotic interest rate option
		An interest rate derivate is a derivative security where the underlying asset is the right to pay or receive a (usually notional) amount of money at a given interest rate.
		An interest rate option which ensures the purchaser pays a maximum interest rate is known as an interest rate cap.
		An interest rate option which ensures the purchaser receives a minimum interest rate is known as an interest rate floor.
	www.wordiq.com /definition/Exotic_interest_rate_option (227 words)

	Interest rate option (Site not responding. Last check: 2007-11-04)
		An interest rate option is a derivative security where the underlying asset is the to pay or receive a (usually notional) of money at a given interest rate.
		An interest rate option which ensures the pays a maximum interest rate is known an interest rate cap.
		An interest rate option which ensures the receives a minimum interest rate is known an interest rate floor.
	www.freeglossary.com /Interest_rate_option (512 words)

	Introduction to Exotic Options (Site not responding. Last check: 2007-11-04)
		Exotic options are either variations on the payoff profiles of the plain vanilla options or they are wholly different kinds of products with optionality embedded in them.
		A knock-in option in which the barrier is in-the-money with respect to the strike is called a reverse knockin option.
		The payoff of average rate options is calculated by taking the difference between the average for a pre-set index over the life of the option and the strike price and then multiplying this difference by the notional amount.
	www.finpipe.com /exoptions.htm (1566 words)

	Exotic mortgages lower payments, but raise risk
		Monthly payments can be made according to a traditional fully-amortizing loan where payments consist of interest and principal; an accelerated 15-year fully-amortizing schedule; an interest-only payment, or a minimum payment that may not cover all of the interest.
		In short, this means that the monthly payments are not sufficient to cover the interest due for that month and the unpaid interest is then added to the loan balance.
		Imagine taking a mortgage loan where the interest rate was adjustable every month from the outset, the loan balance is amortized over a 40-year period, the borrower has the option of making interest-only or minimum payments, and monthly payment and rate adjustment caps could result in the unpaid interest being added to the existing balance.
	www.bankrate.com /brm/news/bank/20040823a1.asp (732 words)

	How option ARMs work
		Most option ARMs are based on one of three indexes: the 11th District Cost of Funds Index (the COFI), the 12-month moving Treasury average (the MTA), or the one-month London Interbank Offered Rate (the 1-month LIBOR).
		The rate on an option ARM is adjusted monthly, but the minimum payment is adjusted annually and remains fixed for a year.
		In a research paper for investors, Fitch Ratings (registration required) calculated a scenario in which a borrower gets a $500,000 option ARM, and the interest rate rises from 5.41 percent to 9.66 percent in five years.
	bankrate.com /gookeyword/news/mortgages/20050901b1.asp (535 words)

	Interest Rate Swaps
		Or, Acme may believe that long-term interest rates are going to rise, causing it to seek protection against the impact of higher interest rates on its balance sheet.
		Therefore, we would expect that in fixed-floating interest rate swaps, the entity paying fixed and receiving floating is usually the less creditworthy of the two counterparties.
		The interest rate swap gives the less creditworthy entity a way of borrowing fixed rate funds for a longer term at a cheaper rate than they could raise such funds in the capital markets by taking advantage of the entity's relative advantage in raising funds in the shorter maturity buckets.
	www.victoryrisk.com /interest_rate_swaps.htm (911 words)

	Options - Real Time & Delayed Quotes, Charts, News and Data for Futures, Stocks, Commodities and Indexes - TradeSignals
		For example the value can calculated be based on a reference rate or something else such as the average price of an underlying asset, as measured at agreed-upon intervals during the life of a contract, i.e.
		Employee stock options are also widely used as a compensation vehicle for employees and, in particular, senior executives of publicy traded corporations.
		However, employee stock options use is being curbed thanks in part to a decision by the Financial Accounting Standards Board (FASB) requiring that stock option grants are recorded on the income statement as an expense.
	www.tradesignals.com /glossary/Options (1193 words)

	Exotic Options Information \| Business.com
		Description of the characteristics, advantages, and disadvantages of this type of interest rate floor where the buyer is only entitled to utilise the floor for a limited and pre-defined number of reset periods.
		Description of this type of interest rate cap where the cap payout is determined by the maximum "average" interest rate over the cap period.
		Description of this type of interest rate floor where the floor payout is determined by the minimum "average" interest rate over the floor period.
	www.business.com /directory/financial_services/investment_banking_and_brokerage/sales_and_trading/options/exotic_options (1701 words)

	Current Home Interest Rate - Information
		Interest rate swaps are to interest rate fluctuations, typically fixed obligations for floating obligations.
		Example float interest rate swap Consider periodic interest rate payments of periodic interest rate payments of the rates are the payments are high rate.
		Debt: bond interest rate and the free Equity: In free The return also Risk External the of reaction: Reaction expression for is constant for is constant for reaction constant k of constant.
	www.freewebs.com /information24/current-home-interest-rate.html (561 words)

	The Mortgages Weblog
		The changes and adjustments that the rates may bring, added to the fact that many of these loans are in areas with inflated housing prices, may cause many homeowners to lose their homes and walk away with nothing due to lack of equity built up during the I/O period.
		However, the option ARM wasn't intended to be used by buyers who "wanted more house for their money" - it was created as a good choice for investers and homeowners who were not going to own the home for very long.
		But in reality, rates have begun to rise and home values are dropping in many areas, and the option ARM has become more of a danger than it looked to be in the past.
	mortgages.weblogsinc.com (4759 words)

	Interest rate Risk- Models (Site not responding. Last check: 2007-11-04)
		The modelling of the term structure of interest rates has produced a variety of approaches since the advent of arbitrage-free pricing theory and it continues to occupy the efforts of both academics and practitioners.
		Nevertheless, the goal of interest rate modelling is to provide a framework under which a large class of interest rate sensitive securities can be priced in a consistent manner.
		For forward rate models, the critical factor in determining the behaviour of a model is the form of the (HJM) volatility function.
	www.financewise.com /public/edit/riskm/interestrate/interestraterisk00-models.htm (3034 words)

	Call option - Real Time & Delayed Quotes, Charts, News and Data for Futures, Stocks, Commodities and Indexes - ...
		American call option allows exercise at any time during the life of the option.
		When a call option is exercised, if it involves shares, the shares are simply being transferred from one owner to another.
		interest rate cap) - as well as on physical assets such as gold or crude oil.
	www.tradesignals.com /glossary/Call_option (884 words)

	Combining Vanilla and Exotic Options by Izzy Nelken
		Of course, since there is no free lunch, the holder of the option is exposed to the risk that the premium may be much higher than the one which would have been paid if the holder would have purchased a vanilla option in the first place.
		Assume that the domestic currency interest rate is 5%, the foreign currency interest rate is 3%, the volatility is set at 15%.
		On February 20, 1998 the domestic currency interest rate is 5%, the foreign currency interest rate is 3%, the volatility is set at 15%.
	www.fenews.com /fen3/combining.html (1355 words)

	exotic option
		Effective Interest Rate The annual rate at which...
		Elasticity of an option Percentage change in the value of an option given a 1% change in the value...
		theta, $\theta$ is the derivative of the option value with respect to the amount of...
	www.idrassociate.org /c3ex4n6n-6.html (597 words)

	»»Exotic-option Reviews««
		It covers almost all aspects of exotic and hybrid instruments: the real life examples, theory behind the pricing models, implementation using different numerical methods, hedging and risk management issues, a good appendix on the basic math stuff and even a sample VBA code to do multivariate MC.
		By restricting attention to interest-rate option models only, the author manages to give a thorough introduction to the subject, that goes way beyond the short chapters in standard textbooks such as Hull's or Wilmott's (I am not familiar with Miron and Swannell).
		He covers the behavior of the Greeks (delta, gamma, vega, theta, etc.) for vanilla options as well as behavior of exotic options, and delves into the practicalities of volatility, hedging at discontinuities, and various other topics.
	www.financial-book-review.com /Exchange-offer/Exotic-option (2217 words)

	Exotic Interest Rate Option @ ArtQuilt.com (Art Quilt) (Site not responding. Last check: 2007-11-04)
		Exotic Interest Rate Option @ ArtQuilt.com (Art Quilt)
		higher payments because of the interest rate reset, but...
		More Exotic Interest Rate Option Page Titles on this Site
	www.artquilt.com /encyclopedia/Exotic_interest_rate_option (106 words)

	Put option - Gurupedia
		The most widely-known put option is the stock option, the option to sell stock in a particular company.
		interest rate floor) - and physical, such as gold or crude oil.
		My option would be worthless and I would have lost my whole investment, the fee for the option.
	www.gurupedia.com /p/pu/put.htm (530 words)

	interest rate option
		One of the very best things about the Internet is that you can now get quality information from on-line lins on options and option investing.
		Publisher's Information: From the Publisher: The modelling of exotic interest-rate options is such an important and fast-moving area, that the updating of the extremely successful first edition has been eagerly awaited.
		Interest Rate Option Models 2nd Ed.: Understanding, Analysing and Using Models fro...
	www.investor-secrets.com /options/interest-rate-option.htm (454 words)

	Exotic interest rate option (Site not responding. Last check: 2007-11-04)
		An non- vanilla interest rate derivative security ; which can usually be expressed in terms of vanilla interest rate derivatives such as interest rate swap s, Swaption s, interest rate cap s, interest rate floor s.
		An example is a binary interest rate cap.
		It uses material from the Wiktionary page "Exotic".
	www.serebella.com /encyclopedia/article-Exotic_interest_rate_option.html (215 words)

	Derivity : Interest Rate Derivatives
		The Swap Option Pricing workbook allows up to 15 swap options for a single currency to be priced on each worksheet.
		The selected option is displayed in a Quick Calculator area at the bottom of the workbook which shows the greeks and includes an implied volatility calculator.
		The Implied Forwards Curve workbook provides a view of the forward interest rates for a given market as implied by the current term structure of interest rates.
	www.derivity.com /derivity_analytics/displays/interest_rate_derivatives.htm (504 words)

	Amazon.com: Interest-Rate Option Models: Understanding, Analysing and Using Models for Exotic Interest-Rate Options ... (Site not responding. Last check: 2007-11-04)
		The modelling of exotic interest-rate options is such an important and fast-moving area, that the updating of the extremely successful first edition has been eagerly awaited.
		Other changes include: a new chapter on the issues arising in the pricing of several classes of exotic interest-rate instruments; and insights from the BDT and the Brennan and Schwartz approaches which can be combined into a new class of "generalised models".
		This is an excellent reference guide to interest rate option models, I used it extensively with Implementing Derivative Models (Wiley Series in Financial Engineering)while I was...
	www.amazon.com /Interest-Rate-Option-Models-Understanding-Engineering/dp/0471979589 (1263 words)

	Books on Interest Rate Futures (Site not responding. Last check: 2007-11-04)
		The modelling of exotic interest-rate options is such an important and fast-moving area, that the updating of the extremely successful first edition has been eagerly awaited.
		Interest rate swaps--used globally by both corporate finance departments and investment firms to control interest payments, manage debt, and enhance investment portfolios--constitute a growing 1.9 trillion market.
		As with previous titles in the IIA (Institute of Internal Auditors) series this is a clear and practical guide to a subject of key importance to financial managers.
	books.bankhacker.com /Interest+Rate+Futures (777 words)

	Techbooks Bookshop : Interest-Rate Option Models - Understanding, Analysing and Using Models from Exotic Interest-Rate ...
		Interest Rate Option Models presents in a unified way the theoretical and practical issues involved in the use of models for pricing of exotic interest rate options.
		Despite the fact that relatively complex mathematical concepts are introduced and used in the book, financial intuition rather than mathematical rigour is emphasised throughout.
		Other changes include: a new chapter on the issues arising in the pricing of several classes of exotic interest-rate instruments; and insights from the BDT and the Breman and Schwartz approaches which can be combined into a new class of 'generalised models'.
	www.global-investor.com /cgi-bin/euler.pl?id=s21412&uid=&action=display&ref=9564 (496 words)

	average american credit card debt (Site not responding. Last check: 2007-11-04)
		Events for specific age, ethnicity and interest preferences.
		interest rate swaps futures foreign exchange forwards or options credit default swaps Some less common, but...
		Other derivative markets include those for Interest Rate Swaps, Credit Default Swaps and Options and forwards on foreign...
	www.debtconsolidationsearch.net /debt/average%20american%20credit%20card%20debt&start=20 (1024 words)

	Interest Rate Formula - Information
		Offer or LIBOR common for borrowing This is frequently the charged to Forward Agreement FRA an interest rate differential on fixed payment at contract rate and Receive floating interest payment at reference rate Underlying rate, determined forward agreements: an of interest rate.
		Payments are contract and the reference rate e.g., LIBOR Payoff The FRA payoff is: Payment Reference Rate Forward Rate Days 360 Reference Days 360 reference is typically floating underlying the the saving in floating underlying the forward rate specified in the is negative Underlying Expr.
		One Indy 1960 One season 1960 One season the interest rate real interest rate consequently crowding higher of return investment of return similar of return interest rate formula.
	www.freewebs.com /information24/interest-rate-formula.html (274 words)

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