Risk glossary


Embedded option

An option, often an interest rate option, embedded in a debt instrument that affects its redemption. Embedded options are usually, but not always, interest rate options; some are linked to the price of an equity index (for example, Nikkei 225 puts embedded in Nikkei-linked bonds) or a commodity (usually gold, but sometimes oil). Embedded options may be embedded in physical commodity contracts or commodity derivatives such as extendible swaps.

  • LinkedIn  
  • Save this article
  • Print this page  

You must be signed in to use this feature.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an indvidual account here: