L

1 Ladder Option

If the barrier L>K is reached over the life of the option, a ladder option at expiration pays max (0, L − K, S_t − K). If the barrier is not reached, the option pays max (0, S_t − K).

Ladder options are “more path-dependent” than barrier options. Normally, there are several prespecified ladders or rungs in a ladder option. Whenever the underlying asset price reaches a prespecified higher level in a series of prespecified rungs, the intrinsic value of the option is locked. [See also Barrier Option]

2 Ladder Strategy

When investing bonds, allocating roughly equivalent amounts (portions) to different maturities.

3 Lagged Reserve Accounting

System of reserve requirements based on deposits outstanding prior to the reserve maintenance period.

4 Lagging Indicator

[See Business cycle]

5 Lambda

Another name for vega. [See Vega]

6 Lattice

A binomial tree in which an up move followed by a down move leads to the same price as a down move followed by an up move. Also called a recombining...