This section allows cross-market comparisons.
Glossary Definition
Interest Rate Options

Options contract based on an underlying debt security. Options, unlike futures, give buyers the right, but not the obligation, to buy the underlying bond at a fixed price before a specific date. Option sellers promise to sell the bonds at a set price anytime until the contract expires (American convention) or on a specified date (European convention). In return for granting this right, the option buyer pays a premium to the option seller. Yield-based calls become more valuable as yields rise, and puts become more valuable as yields decline.