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I:
 IAS 39 - an accounting standard titled, Financial Instruments: Recognition and Measurement, issued by the International Accounting Standards Committee (IASC). IAS 39 is similar, but much less complex, than the U.S. FASB's FAS 133. A summary of IAS 39 is available on the web.

Implied Volatility - a volatility level inferred from an option price. See also Historical Volatility.

In-The-Money - a term used to describe an option contract that has a positive value if exercised.

Interest Rate Parity - an arbitrage condition that must hold between the spot interest rates of different currencies.

International Accounting Standards Committee (IASC) - an organization headquartered in London that has been charged with developing international accounting standards.

Interpolation - for a given a set of bivariate data (x,y), imputing a value of y corresponding to some value of x at which there is no measurement of y, where the value of x is within the range of the measured values of x. See also, Extrapolation.

Intrinsic Value - the amount by which an option is in-the-money. An option which is not in-the-money has no intrinsic value.  For calls, intrinsic value equals the difference between the underlying futures price and the option's strike price.  For puts, intrinsic value equals the option's strike price minus the underlying futures price. Intrinsic value is never less than zero.

Inverse Floater - a floater whose coupon varies inversely to its reference rate.

ISDA - the International Swaps and Derivatives Association.

Itô's Lemma - a continuous time version of the Taylor expansion, which relates the change in a stochastic function to the change in the stochastic variable. In mathematics, Itô's lemma is used in stochastic calculus to find the differential of a function of a particular type of stochastic process. The lemma is widely employed in mathematical finance. Named after the Japanese mathematician and professor at Kyoto University. See also Itô's Theorem.


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