Interest rate option


Ajit Kumar AJIT KUMARWISDOM IAS, New Delhi.

Interest rate option

An Interest rate option is a specific financial derivative contract whose value is based on interest rates. Its value is tied to an underlying interest rate, such as the yield on 10 year treasury notes. Similar to equity options, there are two types of contracts: calls and puts.


Interest Rate Option is 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.

Monday, 15th Feb 2016, 12:01:30 PM

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