Gilts options

The popularity and liquidity of the gilt futures contract led to the listing of gilt options on LIFFE in March 1986. Average daily volume in this contract was more than 16,000 lots during 2002. The contract is an... 

On LIFFE serial expiry months are available for its exchange-traded options serial options are expiry months other than the traditional quarterly months of March, June, September, and December, gilt option expiry months are listed such that the two nearest serial months and the two nearest quarterly months are always available for trading. 

Options are traded both on recognized exchanges and over the counter (OTC). Exchange-traded options are standardized plain vanilla contracts OTC options can take on virtually any form. Options traded on an exchange are often written on futures contracts. For example, a gilt option... 

No thumbnail sketch of the UK linker market s early days would be complete without a mention of the one-off innovation of an index-linked convertible gilt, nicknamed the Maggie Mays. The 2% Index-Linked 1999 was convertible into a nominal bond (10.25% 1999) at three future conversion dates. At a time when inflation remained volatile, and with the term to option expiry spanning a general election whose outcome was uncertain, seldom has so much optionality been sold so cheaply. The bonds were all (or almost all) converted. 

These last two functions actually employ options on gilt futures. 

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