Last update: Jul 20, 11:27
	Get 5%-15% discount in the Derivatives Portal Bookshop Portal's quote of the week : You will be amazed at how much common sense you'll have to drop in order to understand this business. (Joe Ritchie & Mark Ritchie , God in the Pits: Confessions of a Commodities Trader, 1990, p. 8 .)		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   Accrual Accounting When swaps are used to hedge specific on-balance-sheet exposures, they are often accounted for on an accrual basis. Under the accrual method, the net payment or receipt in each period is accrued and recorded as an adjustment to income or expense. Accrual Swap An interest rate swap where interest on one side accrues only when a certain condition is met. Accrued Interest The interest earned on a bond since the last coupon payment date. Actual Hedging Is the risk management of a position when a hedger has a bona fide long or short actual position and is involved in an offsetting transaction. This offset is usually in the derivatives market After Hours Dealing Trading outside the trading hours of the futures markets – eg, trading a futures month in Brent crude outside the IPE and Singapore International Monetary Exchange trading periods. Alternative Investments Are usually investments other than mutual funds, certificates of deposit, or direct investments in equities and bonds. Some of these alternatives are: art, collectibles, commodities, commodity funds, commodity pools, derivatives, American Depository Receipt receipt indicating a claim on some number (less than one, one, or more than one) of shares in a foreign corporation that a Depository Bank holds for U.S. investors. American option An option that may be exercised on any day ahead of expiry. These trade on the futures exchanges. Amortizing Swap A swap where the notional principal decreases in a predetermined way as time passes. Arbitrage The simultaneous purchase and sale of an instrument in two separate markets, when the price is out of line. Asian option An option that is exercised against an average over a period. Ask Price Is the price requested, at the minimum, for an order to be acceptable and executed for the seller. Asset and Liability Management Asset and Liability Management - Is the process for financial institutions and corporations to adjust their funding and usage of funds. Some approaches are the Bucket, GAP, Hedging, Matched Book, Matched Funding, Financial Swaps, and Structured Products. Asset swap A Swap that converts a fixed- (floating-) coupon asset into a floating- (fixed-) coupon asset. This is in contrast to the more familiar (Liability) Swap that converts a fixed- (floating-) coupon liability into a floating- (fixed-) coupon liability. At-the-Money Option (ATM) An option with an exercise price at the current market level of the underlying.
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