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Option to redeem |
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Option 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.Similar MatchesKnock out optionKnock out optionAn option that- is worthless at expiration if the underlying commodity or currency price reaches a specific price level. Down and out optionDown and out optionBarrier option that expires if asset price hits a predetermined price level. Path 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. Abandoned optionAbandoned optionWhere an option is neither sold nor exercised but allowed to lapse at expiry. Option Pricing CurveOption Pricing CurveA graphical representation of the projected price of an option at a fixed point in time. It reflects the amount of time value premium in the option for various stock prices, as well. The curve is generated by using a mathematical model. The delta (or hedge ratio) is the slope of a tangent line to the curve at a fixed stock price. See also Delta and Hedge Ratio Further SuggestionsQualifying stock optionOption premium Long position in an option Indexed Stock Options Option holder Reload Stock Option Option spread Optional dividend Optional payment bond Option seller Gnma (government National Mortgage Association) Options Physical option Exercising the option Foreign currency option Lookback option Virtual currency option Currency option Options contract multiple Lockup option European style option Barrier options Greenshoe option Currency call option Option not to deliver Options contract |
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