This situation may also occur in other markets or those involving bond options contracts. The Chicago Board of Trade CBOT Treasury Bond Futures Contract, which was first introduced in , allows the short position several delivery options as to when and with which bond the contract will ultimately be settled.
The wild card play, which refers to the flexible timing option, allows the short position to choose any business day in the delivery month to actually make delivery to the long contract holder. In addition, the contract settlement price is fixed in place at p. If bond prices change significantly between and p.
This phenomenon, which recurs on every trading day of the delivery month, creates an implied sequence of 6-hour put options for the short position which has been dubbed the "wild card play" or " wild card option ". The value of the implied put option relevant to the wild card play was first formalized by Alex Kane and Alan J. Marcus in a paper for the National Bureau of Economic Research NBER , although earlier research suggested that in practice actual short bond futures participants do not act optimally in taking advantage of the wild card play.
Financial Futures Trading.
WILD CARD | meaning in the Cambridge English Dictionary
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Wild Card weekend schedule
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a wild card
No, I'm really asking. What is it? Test your vocabulary with our question quiz! Build a chain of words by adding one letter at a time. Definition of wild card. Examples of wild card in a Sentence The joker is a wild card. Taxes are the wild card in this election.
The team made it into the play-offs as the wild card. Recent Examples on the Web For Pujols, the weekend was bittersweet in that the Angels dropped two of three games here and fell to four back for the second wild card in the American League race.
Playing the 'Wild Card'
Louis," 23 June At , the Red Sox return home only three games behind Tampa Bay for second place in the American League East and a half-game ahead of the Rangers for the second wild card. Not much," 12 June Are the Rockies playing for the wild card over the next couple of years? First Known Use of wild card , in the meaning defined at sense 1. History and Etymology for wild card wild card , playing card with arbitrarily determined value.