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Floor

Definition:

The area of a stock exchange where active trading occurs. Also the price at which a stop order is activated (when the price drops low enough to activate such an order). In context of interest rates, a level which an interest rate or currency is structured not to go below. In context of OTC interest rate options, a series of interest rate put options, where the buyer of the floor guarantees a minimum interest income

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

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Insurance

Guarding against property loss or damage by making payments in the form of premiums to an insurance company, which pays an agreed-upon sum to the insured in the event of loss.

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