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Glossary

TermDefinition
ATMAt-the-money: strike equals spot
BAWBarone-Adesi-Whaley: analytical American option approximation
BSBlack-Scholes model
CDSCredit default swap
ContractSpecSerializable AST for the contract DSL
CVACredit valuation adjustment
DVADebit valuation adjustment
FDFinite difference method
FFTFast Fourier transform (Carr-Madan pricing)
FVAFunding valuation adjustment
GBMGeometric Brownian motion
GreeksOption sensitivities (delta, gamma, vega, theta, rho)
KVACapital valuation adjustment
LSMLongstaff-Schwartz method for American options
MCMonte Carlo simulation
OTMOut-of-the-money
SABRStochastic Alpha Beta Rho volatility model
T-FTsiveriotis-Fernandes convertible bond decomposition
VaRValue at Risk
XVACollective term for valuation adjustments (CVA, DVA, FVA, KVA)