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InvestHub.com's
Finance Dictionary and Glossary of Investment Terms

embedded option  

Definition 1.

An option that is part of the structure of a bond.
 

Definition 2.

An option that is an inseparable part of another instrument. Compare this to a normal (or bare) option, which trades separately from the underlying security.
 

Definition 3.

An option that is part of the structure of a bond that gives either the bondholder or the issuer the right to take some action against the other party, as opposed to a bare option, which trades separately from any underlying security.
 
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