Apr 102021
 

The underlying loan, security or basket of loans and securities on which a derivative transaction is based

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Nov 072020
 

The profit earned by a responsibility centre that exceeds an amount "charged" for funds committed to that centre

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Nov 062020
 

A hedge where the hedger buys a put and sells a call to hedge being long the underlying asset. The result is that the hedger knows that an exchange rate within a particular range will be achieved. e.g. a German corporate which is long $ (i.e. will receive $) would buy a $ call and sell a $ put with different strikes to create a range forward. It is primarily used to reduce the up-front cost of a vanilla option. If it is structured so that the call and put premiums are the same it is called ‘Zero Cost’. Also called a Cylinder or a Collar.

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