Initial Price - Equity Derivatives Provision: Difference between revisions

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{{eqderivsnap|5.8}}
#redirect[[Equity Swap Transactions - Equity Derivatives Provision]]
Used in {{eqderivprov|Rate of Return}}, whcih in turn is used in {{eqderivprov|Equity Amount}}. It is different to the Equity Notional Amount in that it is expressed as a price ''per {{eqderivprov|Share}}'', whereas the {{eqderivprov|Equity Notional Amount}} tends to be {{eqderivprov|Initial Price}} * {{eqderivprov|Number of Shares}}.
 
Note there is an ''initial'' {{eqderivprov|Initial Price}} — the strike price in the {{isdaprov|Confirmation}} — but it is reset on every {{isdaprov|Valuation Date}} to the {{eqderivprov|Final Price}} on that date — so the {{eqderivprov|Initial Price}} fluctuates over time.
 
The way the {{eqderivprov|Initial Price}} definition is drafted, you don’t need to say “... subject to adjustment on each {{eqderivprov|Valuation Date}}” in the {{isdaprov|Confirmation}}, although for many of you this is sure to prove an irresistible temptation.
 
{{sa}}
*{{eqderivprov|Equity Notional Amount}}
*{{eqderivprov|Equity Notional Reset}}, the process by which your trade is re-struck on each {{eqderivprov|Valuation Date}}.

Latest revision as of 12:55, 11 May 2022