Covered option: option position that is offset by an equal and opposite position in the underlying security. This is the antithesis of a naked option.

Dual-currency issues: for example, Eurobonds that pay coupon interest in one currency but pay the principal in another currency.

Flip-flop notes: a note that allows investors to switch between two types of debt — for example, to switch from a long-term bond to a short-term, fixed-rate note

FRNs (floating rate notes): a note whose interest payment varies with short-term interest rates.

PERLs (principal exchange-rated-linked securities): a debt instrument with its principal and interest in dollars, but with principal repayment depending on the exchange rate between the dollar and a foreign currency

Convertible bonds: general debt obligation of a corporation that can be exchanged for a set number of common shares of the issuing corporation at a prestated conversion price

Put bond: a bond that the holder may choose either to exchange for par value at some date or to extend for a given number of years. If the price is above par, the put is a “premium put.”

Liquid yield option note (LYON): a zero-coupon, callable, putable, convertible bond.

Adjustable rate mortgage (ARM): A mortgage that features predetermined adjustments of the loan interest rate at regular intervals based on an established index. The interest rate is adjusted at each interval to a rate equivalent to the index value plus a predetermined spread, or margin, over the index, usually subject to per-interval and to life-of-loan interest rate and/or payment rate caps.

Financial Glossary at: http://biz.yahoo.com/f/g/