The London International Financial Futures and Options Exchange (LIFFE, pronounced 'life') is a futures exchange based in London. LIFFE is now part of NYSE Euronext following its takeover by Euronext in January 2002 and Euronext's merger with New York Stock Exchange in April 2007.A futures and options exchange in London, England that was modeled after the Chicago Board of Trade … [Read more...]
Globally Floored Contract
Globally Floored Contract is a guarantee found in structured investment products that provides a minimum payoff at maturity. A globally floored contract will protect the investor or minimize his loss in case the underlying investment loses its value. With principal-protected notes, an investor receives a guarantee providing downside protection on the investment. A cost … [Read more...]
Binomial Option Pricing Model
The binomial options pricing model (BOPM) provides a generalizable numerical method for the valuation of options. The binomial model was first proposed by Cox, Ross and Rubinstein (1979). Essentially, the model uses a "discrete-time" model of the varying price over time of the underlying financial instrument.An options valuation method developed by Cox, et al, in 1979. The … [Read more...]
What Does Bunny Bond Mean?
A bond with a provision that bondholders may, at their discretion, reinvest coupon payments in other bonds with the same interest rate and maturity. It is a type of bond that offers investors the option to reinvest coupon payments into additional bonds with the same coupon and maturity.This protects bondholders from the risk that interest rates will fall by the time coupon … [Read more...]
Upside/Downside Volume: Overview
Measures of Upside/Downside separate the volumes for rising markets from those in falling markets. In essence, the indicator is displaying the new flow of volume into or out of the market. Since the value for the indicator will increase over time as more issues are added to the exchange, traders will have to determine the appropriate extreme rating for the indicator where … [Read more...]