Interest Rate Options
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. Investopedia Says:
Interest rate options from exchanges in the United States are offered on Treasury bond futures, Treasury note futures and eurodollar futures. An investor taking a long position in interest rate call options believes that interest rates will rise, while an investor taking a position in interest rate put options believes that interest rates will fall. Related Terms:
Call Option
Futures
Interest Rate
Interest Rate Floor
Long (or Long Position)
Option
Over-The-Counter Market
Put
Short (or Short Position) |