Bermuda option

2021 ISDA Interest Rate Derivatives Definitions

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Bermuda in a Nutshell™

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Bermuda in all its glory

12.4.2 Bermuda. “Bermuda” means a style of Option Transaction or Optional Early Termination Right, specified as such in the Confirmation, pursuant to which the right or rights granted are exercisable only on certain specified dates. edit

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Overview

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Summary

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A Bermuda option is sort of transatlantic, in that it may be exercised at expiry, like a European option, and also during the transaction, like an American option — but only on specified dates.

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References

2021 ISDA Interest Rate Derivatives Definitions

A Jolly Contrarian owner’s manual™

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Crosscheck:
→Bermuda in the 2006 ISDA definitions
→Bermuda in the 2021 ISDA definitions

Bermuda in a Nutshell™

The JC’s Nutshell™ summary of this term has moved uptown to the subscription-only ninja tier. For the cost of ½ a weekly 🍺 you can get it here. Sign up at Substack. You can even ask questions! Ask about it here.

Original text

12.4.2 Bermuda. “Bermuda” means a style of Option Transaction or Optional Early Termination Right, specified as such in the Confirmation, pursuant to which the right or rights granted are exercisable only on certain specified dates.

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Comparisons

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Basics

A Bermuda option is sort of transatlantic, in that it may be exercised at expiry, like a European option, and also during the transaction, like an American option — but only on specified dates.

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