Investor Glossary-bermuda optionInvestor Glossary-bermuda optionInvestor Glossary-bermuda optionInvestor Glossary-bermuda optionInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Bermuda Option

The HTML to link to this page
 

A bermuda option is derivative instrument where the holder of the option has the right, but not the obligation, to exercise his option only on certain predefined dates occurring in regular intervals throughout the duration of the contract. The bermuda option is a hybrid of an american option, where the holder is entitled to exercise at any point for the contract duration, and a european option, where the holder may only exercise his right at the point of expiry. The bermuda option gets its name from the fact that Bermuda lies geographically between the United States and Europe. Bermuda option contracts can either be a put or call type. Bermuda option contracts are less common than their American and European cousins. Further, bermuda option contracts are generally traded over the counter. A bermuda option can apply to a variety of underlying assets, however, this option type tends to be most frequently used with Forex and interest rate contracts (e.g. bermuda swaption).



Rate this Bermuda Option definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: labor relations, balance sheet, VIX, implied volatility, current ratio, reverse mortgage, risk management, minority interest, option premium, inflation, EBITDA, average price per share, ex-dividend date, annual return, 144a, wholly-owned subsidiary, irrevocable trust, Key Rate Duration, APR, stock split, debt service coverage, deferred tax, 1031 exchange, LIBOR, real GDP, Zero Cost Collar, liquidity ratio, 1035 exchange, FTSE, phantom income, covered put, in escrow, stock market close, per diem, margin rate, open position, quality assurance, dividends payable, deferred revenue, required rate of return, FICO score, retained earnings, diluted share, 401a, class C shares, ex-dividend, command economy, limit order, cancelled check


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Home | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2016 Investor Glossary - All rights reserved - Terms of Use