embedded option definition

embedded option

Provision in an agreement that gives a party the right to take a specific action against the other under specified conditions. A 'callable bond,' for example, carries the embedded option on the basis of which its issuer can redeem the bond before its stated maturity date. A 'putable bond,' similarly, carries the embedded option on the basis of which its holder can demand early redemption. Also called embeddo.

embedded option is in the Banking, Commerce & Finance, Corporate, Commercial, & General Law, Investing and Securities & Futures Trading subjects.

embedded option appears in the definition of the following term: embeddo

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