What Is a Putable Swap? A putable swap is a cancellable interest rate swap—containing an embedded put option—where one counterparty makes payments based on a floating rate, while the other party makes payments based on a fixed rate. The fixed-rate receiver (floating-rate payer) has the right, but not the obligation, to terminate the swap on
What Is Put-Call Parity? The term “put-call” parity refers to a principle that defines the relationship between the price of European put and call options of the same class. Put simply, this concept highlights the consistencies of these same classes. Put and call options must have the same underlying asset, strike price, and expiration date in
What Is a Put on a Call? A put on a call (PoC) is a type of compound option whereby a put option is written on a call option. Therefore, there are two strike prices and two exercise dates. If the option owner exercises the put option they will be short a call option, which
What is Put Provision? A put provision allows a bondholder to resell a bond back to the issuer at par, or face value, after a specified period but prior to the bond’s maturity date. Key Takeaways A put provision allows a bondholder to resell a bond back to the issuer at par, or face value
What Is Put Ratio Backspread? A put ratio backspread is an options trading strategy that combines short puts and long puts to create a position whose profit and loss potential depends on the ratio of these puts. Key Takeaways A put ratio backspread is an options trading strategy that combines short puts and long puts
What Is a Put Swaption? A put swaption, or put swap option, is a position on an interest rate swap that gives an entity the right to pay a fixed rate of interest and receive a floating rate of interest from the swap counterparty. Put swaptions are used by those entities seeking to earn floating
What Is Put to Seller? “Put to seller” describes the process of a put option being exercised. The put writer becomes responsible for receiving the underlying shares from the put buyer at the strike price since being long a put gives the holder the right to sell the underlying asset. Put to seller usually occurs when the put’s
What Is a Put Warrant? A put warrant is a type of security that gives the holder the right, but not the obligation, to sell a given quantity of an underlying asset for a specified price on or before a preset date. A put warrant is a company-issued option to sell back to the issuer
What Is PV10? PV10 is a calculation of the present value of estimated future oil and gas revenues, net of forecasted direct expenses, and discounted at an annual rate of 10%. The resulting figure is used in the energy industry to estimate the value of a corporation’s proven oil and gas reserves. Key Takeaways PV10
What Is P-Value? In statistics, the p-value is the probability of obtaining results at least as extreme as the observed results of a statistical hypothesis test, assuming that the null hypothesis is correct. The p-value serves as an alternative to rejection points to provide the smallest level of significance at which the null hypothesis would be rejected.
