Call option callable bond. Sep 15, - The value of the debt option will be a factor of the shape of the yield curve and its dynamics (optionality nature of the callable feature). The call option has multiple exercise dates Bermudan feature. The premium for the option sold by the investor is incorporated in the bond by way of a higher coupon .

Call option callable bond

Who Called My Bond?

Call option callable bond. By issuing a large number of callable bonds, they have a natural hedge, as they can then call their own issues and refinance at a lower rate. The price behaviour of a callable bond is the opposite of that of puttable bond. Since call option and put option are not mutually exclusive, a bond may have both options embedded.

Call option callable bond

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