Home > Term: quanto
quanto
Option with a fixed exchange rate between two currencies at the beginning of the maturity. When the option is exercised, the premium is paid out in the foreign currency. Quantos exist solely as a component of another option. They allow investors to speculate in underlyings denominated in a foreign currency and eliminate the foreign currency risk that would otherwise exist.
- Part of Speech: noun
- Industry/Domain: Banking
- Category: Investment banking
- Company: UBS
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Creator
- Stefan K
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