Credit spread

Credit Spread
A credit spread is an option strategy implemented by the simultaneous purchase and sale of two options where the proceeds of the option sold exceeds the cost of the option purchased.

Credit Spreads
A Credit Spread is the difference between the yield offered by 'safe' government bonds, and that offered by riskier corporate bonds issued by companies.

credit spread
yield difference between Treasury securities and comparable non-Treasury securities, such as mortgage-backed bonds, expressed in basis points. Credit spreads widen in recessions and grow tighter in economic expansions.

Credit Spread
1. The spread between Treasury securities and non-Treasury securities that are identical in all respects except for quality rating.

credit spread swap - Related Articles
Minimizing Credit Risk
Best Practice ...

Also called credit spread, the spread between Treasury securities and non-Treasury securities
that are identical in all respects except for quality rating. For instance, the difference between yields on ...

Credit spreads reflect the particular nature of an obligation. For example, senior debt generally has higher credit quality than subordinated debt of the same issuer.

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GENERIC CREDIT SPREAD - Refers to the corporate bond spread for a particular credit rating and expiry. ...
GENERIC PRICES - Prices that assume a more or less standardized set of transaction characteristics that...

Credit spread - A position in which an option with a higher premium is sold and an option with a lower premium is bought, resulting in 'collecting a credit' when making the trades.

Credit Spread
An option spread position whereby the premium of the option sold exceeds the premium of the option purchased--thus, creating a credit to the investor.
See: Debit Spread; Options; Option Premium; Option Spread; Spread ...

Credit spread
The interest margin over the relevant benchmark representing the additional interest paid by the issuer to account for the incremental risk of the issuer over the risk-free rate.

credit spread: The difference in yield between two bonds of similar maturity but different credit quality.
creditor: A person or entity who is owed payment.

Credit spreads: An options spread position in which the premium on the short position is greater than the premium on the long position.

Credit spread
Applies to derivative products. Difference in the value of two options, when the value of the one sold exceeds the value of the one bought. One sells a "credit spread." Antithesis of a debit spread Related: Quality spread.

Credit spread (option)
[edit] References
McMillan, Lawrence G. (2002). Options as a Strategic Investment (4th ed. ed.). New York : New York Institute of Finance. ISBN 0-7352-0197-8.

Credit spread Related:
Crediting rate The rate offered on an investment type insurance policy.
Cross hedging The practice of with a that is different from the underlying being hedged.

Credit Spread - Is an option position whereby the end result is a credit. For example, the investor who places a vertical bear call spread receives a credit. Similarly, the trader who places a vertical bull put spread receives a premium credit.

A public offering made to investors at large.
Generic credit spread ...

Antithesis of a credit spread. Debt Money borrowed. Debt capacity Ability to borrow. The amount a firm can borrow up to the point where the firm value no longer increases. Debt displacement The amount of borrowing that leasing displaces.

Credit linked security A note whose cash flow depends upon a credit event or credit measure of a referenced entity or asset such as default, credit spread, or rating change.

Options on a credit spread take the form of credit-spread put options. The put-buyer pays an upfront fee to the put-seller in exchange for a contingent payment in the event that the credit spread for an asset rises beyond a pre-agreed upon threshold.

(This difference in promised interest rates between low- and high-risk bonds of the same maturity is called a credit spread.) Bond-rating agencies (Moody's and Standard and Poor's, for example) provide an indication of the relative default risk of ...

Related: cheapest to deliver issue Quality spread Also called credit spread, the spread between Treasury securities and non-Treasury securities that are identical in all respects except for quality rating.

Vertical Bull and Bear Credit Spreads
Volatility - The Birth Of A New Asset Class
Debit Ticket
An accounting entry recorded as a debit that acknowledges money owed. When payment is received a corresponding credit is entered to cancel the debit.

The spread may both be debit spreads (call bull spread vs. put bear spread) or both credit spreads (call bear spread vs. put bull spread). Break-Even Point--the stock price (or prices) at which a particular strategy neither makes nor loses money.

A note whose cash flow depends upon a credit event or credit measure of a referenced entity or asset such as default, credit spread, or rating change.
Credit Period
The length of time for which a firm's customer is granted credit.

Applies to derivative products. Difference in the value of two options, when the value of the one bought exceeds the value of the one sold. One buys a debit spread. Antithesis of a credit spread.
Debt
Money borrowed.

Debit Spread definition :
Applies to derivative products. Difference in the value of two options, when the value of the option bought exceeds the value of the one sold. One buys a "debit spread." Antithesis of a credit spread.

The principle that over a period of time, the market price of a security (eg. the credit spread relative to an underlying bond) will revert back to its mean level.

A liquidity premium can be viewed as compensation for the lower liquidity of corporate bonds compared to government debt and for the risk that the market value of bonds will fall prior to maturity due to increasing credit spreads.

treasury securities and non-Treasury securities that are identical in all respects except for quality rating. For example, the difference between yields on Treasury bills and those on single A-rated industrial bonds. Also called credit spread.

Margin requirements differ depending upon the type of transaction being made or the type of stock being purchased, e.g., selling puts, buying stock, credit spreads. Options are not generally marginable.

Also called credit spread. Quant A person with numerical and computer skills who carries out quantitative analyses of companies. Quantize To convert an asset or liability into a currency other than the regular trading currency.

credit spread A spread option position in which the price of the option sold is greater than the price of the option bought. credit squeeze Government measures designed to limit the supply of credit in the economy, in...

See also: Expense, Banks, Saving, Convertible Bond, Bills