23-31 Interest rate futures options are preferred to bond options because they have more favorable liquidity,credit risk,and market-to-market features.

Question

Quizplus · Accepted Answer

Interest rate futures options typically trade on highly liquid futures exchanges, providing easier access for investors to trade and hedge positions. They also have standardized contract specifications, reducing credit risk and offering daily mark-to-market settlement features that bond options may not have.

23-31 Interest Rate Futures Options Are Preferred to Bond Options