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Sir what is Option deposits? I tried to google but found nothing except IQ option deposit mobile application.
Can you please help me understand?
It normally means the payment of a cash deposit (by a buyer) in conjunction with a contract committing a seller to deliver goods, provide a service etc at a specified time.
Its relevance to investing surplus funds is that it might be used to allow the company to fix a rate of interest for a deposit made in the future.
Eg interest if rates are now 3%, paying an option deposit could guarantee you that rate in 3 months’ time when you have a cash surplus. Even if interest rates fell to 2% you could insist on 3%. If they rose to 4% you could simply ignore your option and invest at 3%
All rather complicated for MA2!