spread a risk
71Z-spread — The Z spread (or ZSPRD) of a bond is the number of basis points one needs to apply to a series of zero rates such that the present value of the bond, accounting for accrued interest, equals the sum of all future cashflows discounted using the… …
72Cat Spread — A cat spread is a type of derivative traded on the Chicago Board of Trade (CBOT) that takes the form of an option on a catastrophe futures contract. In other words, a cat spread is basically a call option spread bought by insurance companies on… …
73Yield Spread — The difference between yields on differing debt instruments, calculated by deducting the yield of one instrument from another. The higher the yield spread, the greater the difference between the yields offered by each instrument. The spread can… …
74Seasonal spread trading — Seasonal spread traders are spread traders that take advantage of seasonal patterns by holding long and short positions in futures contracts simultaneously in the same or a related commodity markets. The spread is the difference between the… …
75Commodity-Product Spread — The commodity product spread is the difference between the price of a raw material commodity and price of a finished product created from that commodity. A common commodity product spread is the crack spread . This is the spread between the price …
76Crush Spread — A trading strategy used in the soybean futures market. A soybean crush spread is often used by traders to manage risk by combining soybean, soybean oil and soybean meal futures positions, into a single position. The spread position is used to… …
77Intermarket Sector Spread — The difference in yields between two fixed income securities with the same maturity, but originating from different investment sectors. Intermarket sector spreads in the bond market, for example, often occur between corporate bonds and government …
78limited risk spread — A bull spread in a market where the price difference between the two contract months covers the full carrying charges. The risk is limited because the probability of the distant month price moving to a premium greater than full carrying charges… …
79Interest Rate Risk — The risk that an investment s value will change due to a change in the absolute level of interest rates, in the spread between two rates, in the shape of the yield curve or in any other interest rate relationship. Such changes usually affect… …
80Interest rate risk — The risk that a security s value changes due to a change in interest rates. For example, a bond s price drops as interest rates rise. For a depository institution, also called funding risk, the risk that spread income will suffer because of a… …
