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Quantos

• Currency options with a guaranteed exchange rate that enable buyers who like the asset, German bonds for example, but not the asset's pricing currency, to arrange to be paid in a different currency for a fee.

 
 Embedded terms in definition
 Asset
Currency option
Currency
Exchange rate
Exchange
Options
 
 Referenced Terms
 Quanto: Is an option feature which removes foreign currency risk from a derivative transaction from the investor's viewpoint. It is built into the structure. Quantos are also known as Guaranteed Exchange Rate Contracts. The purpose is hedge or lock in a known currency exchange rate.

<< Quanto swap Quarterly compounding >>

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