Deferred Payment Option
An option where the price paid is deferred until the end of the option's life (see also options).

Deferred Swap
An agreement to enter into a swap at some point in future (also called a forward swap).

Delivery Month
The month in which an underlying commodity us to be delivered. (see also maturity).

Rate of change in the value of a derivative in response to a change in value of the underlying asset.

Delta Hedging
A hedging strategy designed to make the price of a portfolio of derivatives insensitive to small changes in the price of the underlying asset.

Delta-neutral Portfolio

A portfolio with a delta of zero (ie small price changes in the underlying asset have no impact upon the value of the portfolio).


Mass of a product divided by its volume.

Financial product derived from something else, and having greater leverage than the product it is derive from.

Differential Swap
A swap where a floating rate in one currency is exchanged for a floating rate in another and both rates are applied to the same principal.

Discount Bond
Debt sold for less than its principal value. If a discount bond pays no interest it is called a "pure" discount bond. (Refer to zero coupon bond).

Discount Rate
The annualised dollar return on a Treasury bill or similar instrument expressed as a percentage of the final face value.

A cash payment made tot he owner of a stock.

Dividend Yield
The dividend as a percentage of its stock price.

Unrefined gold and silver bullion bars which will be further refined to almost pure metal

A measure of the average life of a bond. It is also an approximation to the ratio of the proportional change in bond price to the absolute change in its yield. (see also modified duration).

Duration Matching
A procedure for matching the durations of assets and liabilities in financial institutions.

Dynamic Hedging
A procedure for hedging an option position by periodically changing the position held in the underlying assets. The objective is usually to maintain a delta-neutral position.

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