Template:Nutshell Equity Derivatives 9.1: Difference between revisions

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Section {{eqderivprov|9.1}}. '''{{eqderivprov|Physical Settlement of Option Transactions}}'''. In respect of each {{eqderivprov|Exercise Date}} under an {{eqderivprov|Option Transaction}} for which “'''{{eqderivprov|Physical Settlement}}'''” is applicable, on the relevant {{eqderivprov|Settlement Date}}: <br>
{{eqderivprov|9.1}}. '''{{eqderivprov|Physical Settlement of Option Transactions}}'''. For each {{eqderivprov|Exercise Date}} under a {{eqderivprov|Physically-settled}} {{eqderivprov|Option Transaction}}, on the {{eqderivprov|Settlement Date}}: <br>
:(a) in the case of a {{eqderivprov|Call}}, {{eqderivprov|Buyer}} will pay to {{eqderivprov|Seller}} the {{eqderivprov|Settlement Price}} multiplied by the {{eqderivprov|Number of Shares to be Delivered}} or the {{eqderivprov|Number of Baskets to be Delivered}}, as the case may be, (in either case determined without regard to rounding) and {{eqderivprov|Seller}} will deliver to {{eqderivprov|Buyer}} the {{eqderivprov|Number of Shares to be Delivered}} or the {{eqderivprov|Number of Baskets to be Delivered}}, as the case may be, and will pay to {{eqderivprov|Buyer}} the {{eqderivprov|Fractional Share Amount}}, if any; <br>
:(a) '''{{eqderivprov|Call}}s''':
:(b) in the case of a {{eqderivprov|Put}}, {{eqderivprov|Buyer}} will deliver to {{eqderivprov|Seller}} the {{eqderivprov|Number of Shares to be Delivered}} or the {{eqderivprov|Number of Baskets to be Delivered}}, as the case may be, and will pay to {{eqderivprov|Seller}} the {{eqderivprov|Fractional Share Amount}}, if any, and {{eqderivprov|Seller}} will pay to {{eqderivprov|Buyer}} the {{eqderivprov|Settlement Price}} multiplied by the {{eqderivprov|Number of Shares to be Delivered}} or the {{eqderivprov|Number of Baskets to be Delivered}}, as the case may be (in either case determined without regard to rounding); and <br>
::{{eqderivprov|Buyer}} will pay {{eqderivprov|Seller}} ''{{eqderivprov|Settlement Price}} x {{eqderivprov|Number of Shares to be Delivered}}'' or ''{{eqderivprov|Settlement Price}} x {{eqderivprov|Number of Baskets to be Delivered}}'' (without regard to rounding) and  
:(c) such payment and such delivery will be made on the relevant {{eqderivprov|Settlement Date}} through the relevant {{eqderivprov|Clearance System}}({{eqderivprov|s}}) at the accounts specified in the related {{eqderivprov|Confirmation}}. <br>
::{{eqderivprov|Seller}} will deliver the {{eqderivprov|Number of Shares to be Delivered}} or {{eqderivprov|Number of Baskets to be Delivered}} and will pay any {{eqderivprov|Fractional Share Amount}} to {{eqderivprov|Buyer}}; <br>
:(b) '''{{eqderivprov|Put}}s''':
::{{eqderivprov|Buyer}} will deliver the {{eqderivprov|Number of Shares to be Delivered}} or the {{eqderivprov|Number of Baskets to be Delivered}}, and pay any {{eqderivprov|Fractional Share Amount}} to {{eqderivprov|Seller}} and  
::{{eqderivprov|Seller}} will pay to {{eqderivprov|Buyer}} ''{{eqderivprov|Settlement Price}} x {{eqderivprov|Number of Shares to be Delivered}}''  or ''{{eqderivprov|Settlement Price}} x {{eqderivprov|Number of Baskets to be Delivered}}'' (without regard to rounding); and <br>
:(c) such payments and deliveries will be made on the {{eqderivprov|Settlement Date}} through the {{eqderivprov|Clearance System}} to the accounts specified in the {{eqderivprov|Confirmation}}. <br>

Latest revision as of 16:52, 11 May 2022

9.1. Physical Settlement of Option Transactions. For each Exercise Date under a Physically-settled Option Transaction, on the Settlement Date:

(a) Calls:
Buyer will pay Seller Settlement Price x Number of Shares to be Delivered or Settlement Price x Number of Baskets to be Delivered (without regard to rounding) and
Seller will deliver the Number of Shares to be Delivered or Number of Baskets to be Delivered and will pay any Fractional Share Amount to Buyer;
(b) Puts:
Buyer will deliver the Number of Shares to be Delivered or the Number of Baskets to be Delivered, and pay any Fractional Share Amount to Seller and
Seller will pay to Buyer Settlement Price x Number of Shares to be Delivered or Settlement Price x Number of Baskets to be Delivered (without regard to rounding); and
(c) such payments and deliveries will be made on the Settlement Date through the Clearance System to the accounts specified in the Confirmation.
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