A straddle is an option strategy that involves buying both a put option and a call option with the same expiration date and strike price on the same underlying security.
The strategy is only profitable if the share price rises or falls from the strike price by more than the total premium paid.
The straddle implies what the expected volatility and trading range of a security might be by the expiration date.
An asset swap is used to convert cash flow characteristics in order to hedge risks from one financial instrument with undesirable cash flow characteristics to another with favorable cash flow characteristics.
The Bank Note Swap Rate (BBSW) is a short-term interest rate used as a benchmark for valuing Australian dollar derivatives and securities, primarily floating rate bonds.
Boundary conditions were used to establish the minimum and maximum possible values of call and put options prior to the introduction of binomial tree and Black-Scholes pricing models.
A call is an option contract that gives the holder the right, but not the obligation, to buy a certain amount of the underlying security at a certain price for a certain time.
A collar is an options strategy that involves buying a put option down and selling a put option up, which is used to protect against large losses but also cap large profits up.