3 Options warrants and special bonds

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Contenido 1. Options ................................ ................................ ................................ ....................... 2 2. Warrants ................................ ................................ ................................ ..................... 4 3. Convertible bonds ................................ ................................ ................................ ....... 5 4. Reverse convertible bonds ................................ ................................ ........................... 6 5. Structured bonds................................ ................................ ................................ ......... 7 1. Reverse floater................................ ................................ ................................ ......... 7 2. Linked bonds................................ ................................ ................................ ............ 7 3. Step-down and step-up bonds ................................ ................................ .................. 8 4. Callable bonds................................ ................................ ................................ .......... 8 1. Options Options can be used both to obtain a profit (speculation), or to minimize risk. Some variations of “regular” options are futures and forwards , in which both parts are forced to make the transaction at the signed price (there is not exercise right for anyone) ; and swaps, which are a combination of futures/forwards and regular options. With American options, the holder can exercise the option whenever he wants. With European options, they can only be exercised on the exercise date. Call options give the exercise right to the buyer of the underlying, while put options give said right to the seller. The one with…