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Diff or Difference Option
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Diff or Difference Option
(1) An option on the
forward
interest rate differential (DIFF)
between comparable instruments denominated in different currencies. (2) A spread or
outperformance option
with a
payout
linked to the price or rate difference between two
underlyings
. See, for example,
Yield Differential Warrant
, Outperformance Option (diagram),
Spread Option
. See also
Contract for Differences
.
Glossary
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