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Template:Equity giveup: Difference between revisions
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Under a cash equity give-up, the [[hedge fund]] seeks a ''firm price'' indication for a cash equity from an {{tag|executing broker}}, but ''does not act on it'': rather, the [[hedge fund]] says“, all right, sir: hold that thought”, and runs off to its favourite [[prime broker]], whom it instructs to enter into a {{tag|swap}} at the exact price quoted by the {{tag|executing broker}}, directing the [[PB]]’s attention to the winsome [[executing broker]] who is sitting by the phone, holding that thought, all dressed up and with nowhere yet to go. | Under a cash equity give-up, the [[hedge fund]] seeks a ''firm price'' indication for a cash equity from an {{tag|executing broker}}, but ''does not act on it'': rather, the [[hedge fund]] says“, all right, sir: hold that thought”, and runs off to its favourite [[prime broker]], whom it instructs to enter into a {{tag|swap}} at the exact price quoted by the {{tag|executing broker}}, directing the [[PB]]’s attention to the winsome [[executing broker]] who is sitting by the phone, holding that thought, all dressed up and with nowhere yet to go. | ||
In practice, the [[executing broker]] is not quite that demure. It will pre-emptively “allege” the cash trade to the[[hedge fund]]’s [[prime broker]]<ref>Whose identity the hedge fund may have | In practice, the [[executing broker]] is not quite that demure. It will pre-emptively “allege” the cash trade to the[[hedge fund]]’s [[prime broker]]<ref>Whose identity the [[hedge fund]] may have “inadvertently” let on during the post-coital conversation. THERE WAS NO COITUS REMEMBER.</ref>, which is rather like buzzing in on University Challenge before Bamber Gascoigne has finished asking the question: “a little birdie tells me you are going to instruct me to trade on an equity to [[hedge]] a [[swap]] you’re about to put on with your client hedge fund X. Well — here it is!”). | ||
Once the [[PB]] has accepted the [[EB]]’ “allegation”, the [[PB]] prints the trade with the [[Hedge fund]], usually in the form of an [[synthetic equity swap]] transacted under an {{isdama}}. | Once the [[PB]] has accepted the [[EB]]’ “allegation”, the [[PB]] prints the trade with the [[Hedge fund]], usually in the form of an [[synthetic equity swap]] transacted under an {{isdama}}. | ||