Derivatives · glossary
The level above which a cap pays: 4% here. At a 4% fixing the cap pays nothing, and at 5% it pays €25,000 a quarter on €10,000,000. Confirmation 2: Cap Rate · Chapter 3
Explained in Chapter 3, The Cap, and the Family, of Derivatives.
A cap is an option on an interest rate. The buyer pays a premium once. In return, the seller pays the buyer whenever the rate fixes above an agreed level, called the Cap Rate. Atlas is the buyer and Pellhaven Bank plc is the seller.Read Chapter 3, The Cap, and the Family →
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