Drop

Drop: The difference in price between the front month and back month in a mortgage-backed security (MBS) dollar roll trade. A dollar roll is a popular type of trade in the MBS pass-through TBA market.

According to forward securities pricing theory, the front month price should be higher than the back month price. The drop is a function of current short-term interest rates, prepayment estimates, and the supply and demand for pass-throughs in the current delivery or front month.
A pass-through TBA security is said to be trading through fail when the drop is larger than what it would cost a mortgage originator, investor or securities dealer to fail to deliver into a TBA contract for an entire month. When there is a shortage of supply or extreme demand for a TBA security in the current delivery month, the drop can increase to fail or larger, reflecting the fact that securities dealers would rather roll a trade out an additional month at a large drop or fail to deliver that security for an entire month than make delivery in the current month.

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Synonyms:

Globule, Distil, send down or let fall in drops, Distil, fall in drops, drip / Ear-ring, pendant, Lower, sink, depress, let down, let fall, let go, Fall suddenly / Small quantity, very little, least bit, Leave, quit, forsake, desert, relinquish, abandon, forswear, give up, give over, omit, Cease, come to an end, come to nothing / Discontinue, intermit, remit, cease, desist from, break off, leave off, lay aside / Bedrop, spot, speckle, variegate / Utter (casually), let fall, insert or state in passing, write or send informally

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drop — drop … Dictionnaire des rimes
Drop.io — URL drop.io Slogan Simple, private sharing. Available language(s) English Owner … Wikipedia
Drop — (dr[o^]p), n. [OE. drope, AS. dropa; akin to OS. dropo, D. drop, OHG. tropo, G. tropfen, Icel. dropi, Sw. droppe; and Fr. AS. dre[ o]pan to drip, drop; akin to OS. driopan, D. druipen, OHG. triofan, G. triefen, Icel. drj[=u]pa. Cf. {Drip},… … The Collaborative International Dictionary of English
Drop — may refer to: Contents 1 General use 2 Sports 3 Computers and technology … Wikipedia
drop — goal [ drɔpgol ] n. m. • 1892; mot angl., de to drop « tomber » et goal « but » ♦ Anglic. Rugby Coup de pied donné dans le ballon juste après le rebond. Des drop goals. Abrév. cour. DROP . Tenter le drop. Des drops. ● drop nom masculin … Encyclopédie Universelle
drop — ► VERB (dropped, dropping) 1) fall or cause to fall. 2) sink to the ground. 3) make or become lower, weaker, or less. 4) abandon or discontinue. 5) (often drop off) set down or unload (a passenger or goods) … English terms dictionary
drop — [dräp] n. [ME drope < OE dropa, akin to ON drūpa, DROOP, Ger triefen: for IE base see DRIP] 1. a small quantity of liquid that is somewhat spherical, as when falling 2. a very small quantity of liquid 3. [pl.] liquid medicine taken or applied… … English World dictionary
Drop — Drop, v. t. [imp. & p. p. {Dropped}or {Dropt}; p. pr. & vb. n. {Dropping}.] [OE. droppen, AS. dropan, v. i. See {Drop}, n.] 1. To pour or let fall in drops; to pour in small globules; to distill. The trees drop balsam. Creech. [1913 Webster] The… … The Collaborative International Dictionary of English
Drop — Drop, v. i. 1. To fall in drops. [1913 Webster] The kindly dew drops from the higher tree, And wets the little plants that lowly dwell. Spenser. [1913 Webster] 2. To fall, in general, literally or figuratively; as, ripe fruit drops from a tree;… … The Collaborative International Dictionary of English
Drop It on Me — Single by Ricky Martin featuring Daddy Yankee from the album Life R … Wikipedia
drop-in — /drop in /, n. 1. Informal. Also, dropper in. a person who or thing that pays an unexpected or uninvited visit: a feeder for squirrels, raccoons, and other drop ins. 2. Informal. a social gathering at which the guests are not expected to stay… … Universalium

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Drop

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Drop

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