caplet

noun

1. A smooth-coated tablet (pill, as in medicine) shaped like a capsule, used as a tamper-resistant alternative to a capsule, or an easy-to-swallow alternative to regular tablets.
2. A component of an interest rate cap, a derivative instrument that effectively prevents the interest payments on an otherwise variable-rate loan from exceeding an agreed level (the "cap"). Each "caplet", analysable as a call option, covers one interest accrual period (such as three months); the whole interest rate cap is made up of a series of consecutive caplets.