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Non-Equity Option Definition

Definition

The word non-equity option describes a option which has an inherent asset that’s not just a frequent stock. Non-equity options often make reference to options using inherent resources such as products and market indicators.

Explanation

Non-equity options comprise arrangements with inherent assets such as commodities, currenciesand property and indicators. It’s a catch all term utilized to categorize almost any option which isn’t tied into ordinary stock. Non-equity options are also European options, so that they could only be exercised on a specific date and so they on average trade overthecounter.

Investors may utilize non-equity options as hedges against price movements of their underlying advantage. By way of instance, a trader wanting to hedge against the movement of a money can buy a non-equity option. Found in this fashion, these monetary tools play a significant function in controlling hazard.