Option
- Japanese
- オプション
- Last reviewed
- September 25, 2026
This is a draft, shown for review before publication.
An option is a trade in the right to buy or sell an underlying asset at a price fixed in advance, at a set time in the future. The buyer pays a price (the premium) to hold the right, and the seller takes on the obligation to comply if the buyer uses the right.
Related terms
Explained in detail
Pages that use this term
- Probability and Statistics Basics
- Random Walks and Brownian Motion
- Introduction to Stochastic Calculus (Ito's Lemma)
- Dealers and Brokers
- How Corporates Use Derivatives
- How Regional Banks Use Derivatives
- How Hedge Funds Use Derivatives
- Hedging, Speculation and Arbitrage
- Contract Months and Tick Sizes
- Futures Margin and Daily Settlement
- Japanese Exchanges and Listed Products
- What Is a Derivative?
- Forwards and Futures
- How Swaps Work
- Option Payoffs and Profit/Loss
- Exercise Styles: European, American and Bermudan
- Put-Call Parity
- Option Strategies
- Overview of Exotic Options
- Barrier Options
- Digital Options
- Quanto Options
- Caps and Floors
- Swaptions
- Overview of Exotic Rate Products
- Bermudan Swaptions
- Constant Maturity Swaps (CMS)
- CMS Spread Options
- FX Options
- FX Option Market Conventions
- FX Barrier Options
- Target Redemption Forward (TARF)
- Equity Index Options
- Single Stock Options
- Warrants
- Overview of Exotic Equity Products
- Dividend Swaps and Futures
- Variance Swaps and Volatility Swaps
- Worst-of Options
- Cliquets
- CDS Indices (iTraxx, CDX)
- Synthetic CDOs and Tranches
- Inflation-Indexed JGBs and BEI
- Inflation Caps and Floors
- Overview of Commodity Derivatives
- Power
- Agricultural Commodities
- Emissions
- Weather Derivatives
- Volatility Products such as VIX Futures
- Property Derivatives
- Freight Derivatives (FFA)
- What Are Structured Products?
- Exchangeable Bonds (EB)
- Equity Index-Linked Notes
- Callable Bonds and Early Redemption Features
- Convertible Bonds (CB)
- Digital Coupon Notes
- Structured Deposits
- Structured Loans
- No-Arbitrage and Replication
- Binomial Trees
- Risk-Neutral Valuation
- The Black-Scholes Model
- The Greeks
- Implied Volatility
- Volatility Smiles and Surfaces
- The Black and Bachelier Models
- ISDA SIMM: The Standard Model for Initial Margin
- The Hull-White Model
- The LIBOR Market Model (LMM)
- The SABR Model
- Local Volatility Models
- The Heston Model
- Model Calibration
- Monte Carlo Simulation
- Finite Difference Methods
- Adjoint Algorithmic Differentiation (AAD)
- Delta Hedging
- Managing Gamma and Vega
- Hedging Exotic Products
- Market Making
- Volatility Trading
- Sensitivities: DV01, Vega and Key Rate Sensitivities
- Stress Testing
- Exposure Measures: CE, PFE, EE/EPE and EAD
- Exposure Profiles by Product
- Counterparty Risk and XVA
- Rogue Trading Cases: Barings, Societe Generale and Others
- P&L Attribution
- Product Explanations and Pre-Contract Disclosures
- Mark-to-Market Reporting to Clients
- Lifecycle Event Processing
- Regulatory Reporting
- Accounting Operations
- Front-to-Back System Architecture
- Lifecycle Event Data
- Market Data Management
- The ISDA Common Domain Model (CDM)
- Identifiers: LEI, UTI, and UPI
- Japan's Fair Value Measurement Standard
- Hedge Accounting under IFRS 9 and ASC 815
- Embedded Derivatives
- Taxation of Derivative Gains and Losses
- Withholding Tax
- Central Counterparties: JSCC, LCH, CME and Others
- Major Electronic Trading Platforms
- New Product Approval
- Mis-Selling Cases
- The Financial Instruments and Exchange Act and Derivatives
- The Financial Services Provision Act
- The Commodity Derivatives Transaction Act
- Trade Reporting
- Suitability and the Duty to Explain
- Overview of Derivatives Regulation in the US
- The Roles of the CFTC and SEC
- Dodd-Frank Act Title VII
- The Volcker Rule
- EMIR
- PRIIPs
- The Fundamental Review of the Trading Book (FRTB)
- The Standardized Approach for Counterparty Credit Risk (SA-CCR)
- South Korea
- Australia
- Insider Trading
- The Development of Futures Exchanges
- The Collapse of LTCM
- Crypto-Asset Derivatives