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1. A {{tag|derivative}} contract — or a feature embedded into a derivative contract — whereby one party grants to the other right to require it to perform a financial obligation at some point in the future. There are [[American option]]s — where the option may be exercised at any time in its period — and [[European option]]s where it may be exercised only at maturity. | {{a|glossary|}}1. A {{tag|derivative}} contract — or a feature embedded into a [[derivative contract]] — whereby one party grants to the other right to require it to perform a financial obligation at some point in the future. There are [[American option]]s — where the option may be exercised at any time in its period — and [[European option]]s where it may be exercised only at maturity. | ||
2. More generally, a [[discretion]], as opposed to an [[obligation]]. | 2. More generally, a [[discretion]], as opposed to an [[obligation]]. | ||
3. What most [[risk controllers]] are short. You don’t get any credit for saying, “yeah, that should be fine”, however fine things turn out to be. You can get fired for it though. | 3. What most [[risk controllers]] are short. You don’t get any credit for saying, “yeah, that should be fine”, however fine things turn out to be. You can get fired for it though. |