Increased Cost of Hedging - Equity Derivatives Provision: Difference between revisions

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Part of the famed “[[triple cocktail]]” of protections against unexpected problems hedging and risk managing {{isdaprov|Transaction}}s, together with {{eqderivprov|Hedging Disruption}} and {{eqderivprov|Change in Law}}. Note also references to {{eqderivprov|Hedging Party}}.
Part of the famed “[[triple cocktail]]” of protections against unexpected problems hedging and risk managing {{isdaprov|Transaction}}s, together with {{eqderivprov|Hedging Disruption}} and {{eqderivprov|Change in Law}}. Note also references to {{eqderivprov|Hedging Party}}.


===Counterparty credit deterioration===
===Excluding own credit deterioration===
{{gmlsaprov|Increased Cost of Hedging}} excludes costs arising from the deterioration of its own credit — so it will tend to caputre market wide cost increases, not ones that a are personal to the {{gmslaprov|Hedging Party}}. Assiduous sell-side [[broker|brokers]] will try to cut out the “deterioration of own credit” wording.
{{gmslaprov|Increased Cost of Hedging}} excludes costs arising from the deterioration of its own credit — so it will tend to caputre market wide cost increases, not ones that a are personal to the {{gmslaprov|Hedging Party}}. Assiduous sell-side [[broker|brokers]] will try to cut out the “deterioration of own credit” wording.


{{triplecocktail}}
{{triplecocktail}}

Revision as of 12:36, 4 March 2019

Template:EqderivanatTemplate:Eqderivanat Compare with Increased Cost of Stock Borrow, the equivalent provision where the Hedging Party is short.

Part of the famed “triple cocktail” of protections against unexpected problems hedging and risk managing Transactions, together with Hedging Disruption and Change in Law. Note also references to Hedging Party.

Excluding own credit deterioration

Increased Cost of Hedging excludes costs arising from the deterioration of its own credit — so it will tend to caputre market wide cost increases, not ones that a are personal to the Hedging Party. Assiduous sell-side brokers will try to cut out the “deterioration of own credit” wording.

Template:Triplecocktail

See also

References

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