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Option cycle |
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Option cycleThe cycle of option expiration months. The most common cycles are: January, April, July, and October (JAJO); February, May, August, and November (FMAN); and March, June, September, and December (MJSD).Option cycle Similar MatchesPath dependent optionPath dependent optionAn option whose value depends on the sequence of prices of the underlying asset rather than just the final price of the asset. Stock optionStock optionAn option whose underlying asset is the common stock of a corporation. Option to redeemOption to redeemSome stocks, in particular loan notes, give their holders the right to convert the stock into cash at particular times during the stock's life. In the case of loan notes, the opportunity will often occur at the time the interest payments are made which may be half-yearly or quarterly. Holders of stock who want to redeem will know in advance when the dates are, and invariably have to give formal notice to the company in advance of their wish to redeem. Government bonds (gilts) also carry an option to redeem sometimes. Split fee optionSplit fee optionAn option on an option. The buyer generally executes the split fee with first an initial fee, with a window period at the end of which (upon payment of a second fee) the original terms of the option may be extended to a later predetermined final notification date. Basket optionsBasket optionsPackages that involve the exchange of more than two currencies against a base currency at expiration. The basket option buyer purchases the right, but not the obligation, to receive designated currencies in exchange for a base currency, either at the prevailing foreign exchange market rate or at a prearranged rate of exchange. Multinational corporations with multicurrency cash flows frequently use basket options because it is generally cheaper to buy an option on a basket of currencies than to buy individual options on each of the currencies that make up the basket. Further Suggestionsoption premiumArbitrage free option pricing models London International Financial Futures and Options Exchange Call an option Liquid yield option note (LYON) Knock out option index options Reduction Option Loan (ROL) European Options Exchange (EOE) Lookback option Option agreement Options contract multiple option writer Tax timing option call option Transferable Stock Options Barrier options Optional dividend option Multi option financing facility Swiss Options and Financial Futures Exchange (SOFFEX) Margin requirement (options) Kuala Lumpur Options and Financial Futures Exchange (KLOFFE) Intrinsic value of an option Switching options |
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