TAILING A HEDGE
When a hedge is discounted using present value because the value changes daily.
Your Free Online Legal Dictionary • Featuring Black’s Law Dictionary, 2nd Ed.
When a hedge is discounted using present value because the value changes daily.
Mapping interest rates across time on a yield curve. Refer to expectation, liquidity preference, and market segmentation theory.
A spread that takes advantage of volatility or percieved price in the forward market. This happens when options are traded with the same strike price but different maturity dates. AKA calendar spread
The potential for a credit rating of a company to go from one class to another.
When a take over happens because stockholders are offered a great price for a first cut off date. The remaining holders get a less attractive deal. Refer to anyandall bid and fair
Accepting a sellers price. Refer to hit the bid.
Expected exposure of a derivative based on an underlying market reference. Refer to average expected, average worstcase, and terminal worstcase exposures.
The remaining value of a contract attributed to time. The value declines daily. Refer to theta and time decay.
Loss that occurs when a foreign exchange currency is turned into the home countries monetary unit. It is reflected in an equity account. AKA currency translation risk. Refer to transaction risk.
When an institution offers a client a loan at a low margin in exchange for better business opportunites in the future. This is sometimes illegal. Refer to reverse tying.
The funding of a lease for 1 to 15 years. Used to fund inventory.
Exposure of a derivative based on its ending performance. Refer to average exposure.
The theory that the money owned now will be worth more in the future.
A US treasury note or bond whose profits are linked to inflation. They are sold in small amounts to make them available to retail investors.They pay coupons on a cycle with principal
Replacing one mode of financing for another.
Expected exposure of a derivative based on the worse performance of an underlying market resource. Refer to average expected, average worst case and terminal expected risk exposures.
A firms ability to cover its debt. The better the ratio the stronger the coverage.
The difference between the eurodollar deposits and treasury bills that mature at the same time. The less the difference the more business improvement.
When a company offers to buy another to improve profits, clients access, and assets. It can be friendly or hostile. Refer to bid.
A transaction that increases risk and produces loss.