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Spread Option
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(1) Usually an option to lock an interest rate spread into the terms of a financial instrument. The rates may be denominated in different currencies, and the spread option may be embedded in a note or bond. Also called Option on a Spread, Spreadtion. See Cross-Currency Cap or Floor. See also Diff or Difference Option, International Spread Option, Warrant or Note. (2) See Outperformance Option (diagram).
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