Alphabetical - C

Cable	Shorthand for dollar/sterling rate
Calendar Spread	A position that is created by taking a long position in a call option that matures at one time and a short position in a similar call option that matures at a different time.
Call Date	??
Call Money	Money lent by banks to other banks or discount houses which can be recalled at noon each day
Call Option	An option to buy an asset at a certain price on a certain date some time in the future.
Call Protection	??
Call Risk	??
Call Schedule	??
Callable Bond	The issuer has the right to redeem the bond at a specified earlier date than the one orginally fixed as the final maturity.
Callable Credit Products	??
Cancelable Swap	Swaps that can be cancelled by one side of prespecified dates.
Cap	An agreement with a counterparty which sets an upper limit to interest rates for the cap buyer for a stated time period.
Cap Rate	The rate determining payoffs in an interest rate cap
Capital Adequacy	The need to maintain adequate capital to cover counterparty risk and position risk
Capital Asset Pricing Model	A model relating the expected return on an asset to its beta.
Capital Gains Tax	A tax on the profit when you sell (or 'dispose of') something (an 'asset') that's increased in value.
Capital Growth Bond	Issue price at par (100%) with redemption at a multiple of that amount.
Capital Markets	The market for medium and long term securities
Capital Ratio	The ratio of a banks primary capital to a weighted value of assets
Capitalisation	Market capitalisation of a company is the number of shares multiplied by the current price
Capitalisation Issue	An issue where funds from a company's reserves are converted into shares and offered free of charge to shareholders.
Caplet	One component on an interest rate cap
Cash Flow Mapping	A procedure for representing an instrument as a portfolio of zero-coupon bonds for the purpose of calculating value at risk.
Cash Ratio	The proportion of a bank's liabilities which it considers prudent to keep in the form of cash.
Cash Settlement	Where the product is settled at expiry, based on the differential between the fixed/guaranteed price and the underlying instrument. Procedure for settling a futures contract in cash rather than by delivering the underlying asset.
Cash-Or-Nothing Call Option	An option that provides a fixed predetermined payoff if the final asset price is above the strike price and zero otherwise.
Cash-Or-Nothing Put Option	An option that provides a fixed predetermined payoff if the final asset price is below the strike price and zero otherwise.
CAT Bond	Bond where the interest, and possibly, the principal paid are reduced if a particular category of "catastrophic" insurance claims exceed a certain amount.
CDO	A security based on a mix of debt and credit risk. Different laters often referred to as tranches (or slices) each having different risk and maturities.
Central Counterparty Model	Set up by the Stock Exchange to remove credit risk when buying and selling.
Certificate of Deposit	A tradeable deposit issued by banks and building societies.
Certificates of Participation	A type of municipal bond that are often used to finance capital improvement projects or equipment.
CHAPS	Clearing House Automated Payments System - for electronic clearing of payments the same day (UK)
Cheapest-To-Deliver Bond	The bond that is cheapest to deliver in the Chicago Board of Trade bond futures contract.
Chinese Wall	A theoretical barrier between different sections of a firm to avoid fraud (i.e. conflicts of interest or insider dealing). One part of the firm may not pass sensitive information to another if it is against a client's interest.
CHIPS	Clearing House Interbank Payments - electronic bank clearing in New York
Chooser Option	An option where the holder has the right to choose whether it is call or a put at some point during its life.
CIRCUS	Combined Interest Rate and Currency Swap
Clean Price	Price of a bond not including the accrued interest element. This is the quoted price. The cash price paid for the bond (or dirty price) is calculated by adding the accrued interest to the clean price.
Clearing Bank	Banks which are part of the clearing system which significantly reduces the number of interbank payments.
Clearing House	A firm that guarantees the performance of the parties in an exchange-traded derivatives transaction. Central Body guaranteeing contracts in a traded options/futures market. Also known as clearing corporation.
Clearing Margin	A margin posted by a member of a clearing house.
CLO	Collateralized Loan Obligation - is a single security backed by a pool of debt.
Closing Out	For futures market - taking the opposite contract for example having previously bought 100 tons of cocoa for June delivery, the buyer now sells 100 tons for the same delivery (or vice-versa)
CME	Chicago Mercantile Exchange
CMO	Collaterized Mortgage Obligation - A mortgage backed security where investors are divided into classes and there are rules for determining how principal repayments are channeled to the classes.
Collar	see Interest Rate Collar
Collateral	??
Collaterised	??
Combination	A position involving both calls and puts on the same underlying asset.
Commercial Banking	The classic banking business of taking deposits and lending money, either retail or wholesale
Commerical Paper	An unsecured IOU issued by large companies and banks.
Commission Brokers	Individuals who execute trades for other people and charge a commission for doing so.
Commodity Swap	A swap where cash flows depend on the price of a commodity.
Complex Power Duals	??
Compound Option	An option on an option. The holder (buyer) has an option to purchase another option on a pre-set date at a pre-agreed premium.
Compounding Frequency	This defines how an interest rate is measured.
Compounding Swap	Swap where interest compounds instead of being paid.
Concert Party	A group acting together (secretly) in a takeover situation for example three people each buy 2.9% of shares to avoid no longer being able to hide behind nominee status.
Confirmation	Contract confirming verbal agreement between two parties to a trade in the over-the-counter market.
Consolidation	Reorganising share holdings so that, for example 10 shares at 10p are replaced by a one £1 nominal
Constant Maturity Swap	A swap where a swap rate is exchanged for eother a fixed rate or a floating rate on each payment date.
Constant Maturity Treasury Swap	A swap where the yield on a Treasury Bond is exchanged for either fixed rate or floating rate on each payment date.
Consumption Asset	An asset held for consumption rather than investment
Contango	A situation where the futures price is above the expected future spot price.
Continuous Compounding	A way of quoting interest rates. It is the limit as the assumed compounding interval is made smaller and smaller.
Contract for Difference	A derivative product to trade the price differential over an indefinite time period.
Contract Size	The unit of trading on a derivatives contract.
Control Variate Technique	A technique that can sometimes be used for improving the accuracy of a numerical procedure.
Convenience Yield	A measure of the benefits from ownership of an asset that are not obtained by the holder of a long futures contract on the asset.
Conversion Factor	A factor used to determine the number of bonds that must be delivered in the bond futures market.
Convertible	A convertible bond may be converted later into equity, some other bond or even a commodity
Convertible Bond	A corporate bond that can be converted into a predetermined amount of the company's equity at certain times during its life.
Convertible Rate FRN	An issue which carries the option to convert either from an initial floating rate note into a fixed rate bond or from a fixed rate bond into a floating rate note.
Convexity	A measure of the curvature in the relationship between bond prices and bond yields.
Convexity Adjustment	An overworked term. It can refer to the adjustment necessary to convert a futures interest rate to a forward interest rate.
Corporate Bond	??
Corporate Finance	The department of an investment bank dealing with takeovers, mergers and strategic advice to companies
Cost of Carry	The storage costs plus the cost of financing as asset minus the income earned on the asset.
CounterParty	The opposite side in a financial transaction.
CounterParty Risk	The risk involved if a counterparty fails to settle
Coupon	Interest payment made on a bond.
Coupon Rate	??
Coupon Stripping	Detaching the coupons from a bond and selling the coupons and the principal as individual zero coupon bonds
Coupons	Issued with bearer bonds to enable the holder to claim the interest.
Cover	An abbreviation of "short cover".
Covered Bond	Is a bond issued by a financial institution that remains on its balance sheet.
Covered Call	A short position in a call option on an asset combined with a long position in the asset.
Covered Warrant	A warrant issued by a party other than the originator or issuer of the underlying asset
Covered Writing	Where an option is sold against an existing position.
Credit Default Swap	An instrument that gives the holder the right to dell a bond for its face value in the event of a default by the issuer.
Credit Derivative	A derivative whose payoff depends on the creditworthiness of the one or more entities
Credit Enhancement	??
Credit Ratings	A measure of the creditworthiness of a bond issue.
Credit Risk	The risk that a loss will be experienced because of the default by the counterparty in a derivatives transaction.
Credit Spread	The interest rate spread between 2 debt issues of similar duration, maturity etc.
Credit Spread Option	Option whose payoff depends on the spread between the yields earned on two assets.
Credit Valuation Adjustment	This is the market value of the counterparty credit-risk.
CREST	The new UK Electronic settlement registering system introduced in July 1996.
CTD	Cheapest To Deliver bond
Cum Dividend	Means the buyer will get the recently announced dividend.
Cumulative	Applied to a Preference Share - if dividend is missed it is still owed to the holder.
Currency Risk	The risk of losses resulting from movements in currency exchange rates.
Currency Swap	??
Currency Warrants	??
Current Yield	??
CUSIP	??
Custodian	??
Cyclical Stock	The share prices of these companies move dramatically (up and down) relative to the economy.
Cylinder	Name used for a collar in currency markets.

Cable Shorthand for dollar/sterling rate
Calendar Spread A position that is created by taking a long position in a call option that matures at one time and a short position in a similar call option that matures at a different time.
Call Date ??
Call Money Money lent by banks to other banks or discount houses which can be recalled at noon each day
Call Option An option to buy an asset at a certain price on a certain date some time in the future.
Call Protection ??
Call Risk ??
Call Schedule ??
Callable Bond The issuer has the right to redeem the bond at a specified earlier date than the one orginally fixed as the final maturity.
Callable Credit Products ??
Cancelable Swap Swaps that can be cancelled by one side of prespecified dates.
Cap An agreement with a counterparty which sets an upper limit to interest rates for the cap buyer for a stated time period.
Cap Rate The rate determining payoffs in an interest rate cap
Capital Adequacy The need to maintain adequate capital to cover counterparty risk and position risk
Capital Asset Pricing Model A model relating the expected return on an asset to its beta.
Capital Gains Tax A tax on the profit when you sell (or 'dispose of') something (an 'asset') that's increased in value.
Capital Growth Bond Issue price at par (100%) with redemption at a multiple of that amount.
Capital Markets The market for medium and long term securities
Capital Ratio The ratio of a banks primary capital to a weighted value of assets
Capitalisation Market capitalisation of a company is the number of shares multiplied by the current price
Capitalisation Issue An issue where funds from a company's reserves are converted into shares and offered free of charge to shareholders.
Caplet One component on an interest rate cap
Cash Flow Mapping A procedure for representing an instrument as a portfolio of zero-coupon bonds for the purpose of calculating value at risk.
Cash Ratio The proportion of a bank's liabilities which it considers prudent to keep in the form of cash.
Cash Settlement Where the product is settled at expiry, based on the differential between the fixed/guaranteed price and the underlying instrument. Procedure for settling a futures contract in cash rather than by delivering the underlying asset.
Cash-Or-Nothing Call Option An option that provides a fixed predetermined payoff if the final asset price is above the strike price and zero otherwise.
Cash-Or-Nothing Put Option An option that provides a fixed predetermined payoff if the final asset price is below the strike price and zero otherwise.
CAT Bond Bond where the interest, and possibly, the principal paid are reduced if a particular category of "catastrophic" insurance claims exceed a certain amount.
CDO A security based on a mix of debt and credit risk. Different laters often referred to as tranches (or slices) each having different risk and maturities.
Central Counterparty Model Set up by the Stock Exchange to remove credit risk when buying and selling.
Certificate of Deposit A tradeable deposit issued by banks and building societies.
Certificates of Participation A type of municipal bond that are often used to finance capital improvement projects or equipment.
CHAPS Clearing House Automated Payments System - for electronic clearing of payments the same day (UK)
Cheapest-To-Deliver Bond The bond that is cheapest to deliver in the Chicago Board of Trade bond futures contract.
Chinese Wall A theoretical barrier between different sections of a firm to avoid fraud (i.e. conflicts of interest or insider dealing). One part of the firm may not pass sensitive information to another if it is against a client's interest.
CHIPS Clearing House Interbank Payments - electronic bank clearing in New York
Chooser Option An option where the holder has the right to choose whether it is call or a put at some point during its life.
CIRCUS Combined Interest Rate and Currency Swap
Clean Price Price of a bond not including the accrued interest element. This is the quoted price. The cash price paid for the bond (or dirty price) is calculated by adding the accrued interest to the clean price.
Clearing Bank Banks which are part of the clearing system which significantly reduces the number of interbank payments.
Clearing House A firm that guarantees the performance of the parties in an exchange-traded derivatives transaction. Central Body guaranteeing contracts in a traded options/futures market. Also known as clearing corporation.
Clearing Margin A margin posted by a member of a clearing house.
CLO Collateralized Loan Obligation - is a single security backed by a pool of debt.
Closing Out For futures market - taking the opposite contract for example having previously bought 100 tons of cocoa for June delivery, the buyer now sells 100 tons for the same delivery (or vice-versa)
CME Chicago Mercantile Exchange
CMO Collaterized Mortgage Obligation - A mortgage backed security where investors are divided into classes and there are rules for determining how principal repayments are channeled to the classes.
Collar see Interest Rate Collar
Collateral ??
Collaterised ??
Combination A position involving both calls and puts on the same underlying asset.
Commercial Banking The classic banking business of taking deposits and lending money, either retail or wholesale
Commerical Paper An unsecured IOU issued by large companies and banks.
Commission Brokers Individuals who execute trades for other people and charge a commission for doing so.
Commodity Swap A swap where cash flows depend on the price of a commodity.
Complex Power Duals ??
Compound Option An option on an option. The holder (buyer) has an option to purchase another option on a pre-set date at a pre-agreed premium.
Compounding Frequency This defines how an interest rate is measured.
Compounding Swap Swap where interest compounds instead of being paid.
Concert Party A group acting together (secretly) in a takeover situation for example three people each buy 2.9% of shares to avoid no longer being able to hide behind nominee status.
Confirmation Contract confirming verbal agreement between two parties to a trade in the over-the-counter market.
Consolidation Reorganising share holdings so that, for example 10 shares at 10p are replaced by a one £1 nominal
Constant Maturity Swap A swap where a swap rate is exchanged for eother a fixed rate or a floating rate on each payment date.
Constant Maturity Treasury Swap A swap where the yield on a Treasury Bond is exchanged for either fixed rate or floating rate on each payment date.
Consumption Asset An asset held for consumption rather than investment
Contango A situation where the futures price is above the expected future spot price.
Continuous Compounding A way of quoting interest rates. It is the limit as the assumed compounding interval is made smaller and smaller.
Contract for Difference A derivative product to trade the price differential over an indefinite time period.
Contract Size The unit of trading on a derivatives contract.
Control Variate Technique A technique that can sometimes be used for improving the accuracy of a numerical procedure.
Convenience Yield A measure of the benefits from ownership of an asset that are not obtained by the holder of a long futures contract on the asset.
Conversion Factor A factor used to determine the number of bonds that must be delivered in the bond futures market.
Convertible A convertible bond may be converted later into equity, some other bond or even a commodity
Convertible Bond A corporate bond that can be converted into a predetermined amount of the company's equity at certain times during its life.
Convertible Rate FRN An issue which carries the option to convert either from an initial floating rate note into a fixed rate bond or from a fixed rate bond into a floating rate note.
Convexity A measure of the curvature in the relationship between bond prices and bond yields.
Convexity Adjustment An overworked term. It can refer to the adjustment necessary to convert a futures interest rate to a forward interest rate.
Corporate Bond ??
Corporate Finance The department of an investment bank dealing with takeovers, mergers and strategic advice to companies
Cost of Carry The storage costs plus the cost of financing as asset minus the income earned on the asset.
CounterParty The opposite side in a financial transaction.
CounterParty Risk The risk involved if a counterparty fails to settle
Coupon Interest payment made on a bond.
Coupon Rate ??
Coupon Stripping Detaching the coupons from a bond and selling the coupons and the principal as individual zero coupon bonds
Coupons Issued with bearer bonds to enable the holder to claim the interest.
Cover An abbreviation of "short cover".
Covered Bond Is a bond issued by a financial institution that remains on its balance sheet.
Covered Call A short position in a call option on an asset combined with a long position in the asset.
Covered Warrant A warrant issued by a party other than the originator or issuer of the underlying asset
Covered Writing Where an option is sold against an existing position.
Credit Default Swap An instrument that gives the holder the right to dell a bond for its face value in the event of a default by the issuer.
Credit Derivative A derivative whose payoff depends on the creditworthiness of the one or more entities
Credit Enhancement ??
Credit Ratings A measure of the creditworthiness of a bond issue.
Credit Risk The risk that a loss will be experienced because of the default by the counterparty in a derivatives transaction.
Credit Spread The interest rate spread between 2 debt issues of similar duration, maturity etc.
Credit Spread Option Option whose payoff depends on the spread between the yields earned on two assets.
Credit Valuation Adjustment This is the market value of the counterparty credit-risk.
CREST The new UK Electronic settlement registering system introduced in July 1996.
CTD Cheapest To Deliver bond
Cum Dividend Means the buyer will get the recently announced dividend.
Cumulative Applied to a Preference Share - if dividend is missed it is still owed to the holder.
Currency Risk The risk of losses resulting from movements in currency exchange rates.
Currency Swap ??
Currency Warrants ??
Current Yield ??
CUSIP ??
Custodian ??
Cyclical Stock The share prices of these companies move dramatically (up and down) relative to the economy.
Cylinder Name used for a collar in currency markets.