Price Return - Equity Derivatives Provision: Difference between revisions

Latest revision as of 08:27, 17 May 2022

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-{{eqderivsnap|8.6(a)}}
+#redirect[[Cash Settlement - Equity Derivatives Provision]]
-====Commentary====
-To be contrasted with {{eqderivprov|Total Return}}. And [http://en.wikipedia.org/wiki/Voodoo_Child_(Slight_Return) Slight Return]. The {{eqderivprov|Price Return}} is the subtraction of the {{eqderivprov|Settlement Price}} from the {{eqderivprov|Initial Price}}, and can (if the underlier incereases in value over the life of the Transaction) be a positive of a negative number. If it's positive, the Equity Amount Payer pays it. If it's negative, the {{eqderivprov|Equity Amount Receiver}} pays the absolute value.
-(by contrast the Total Return formulaton is {{eqderivprov|Equity Notional Amount}} * ({{eqderivprov|Settlement Price}}/{{eqderivprov|Initial Price}}), which can't be negative, since both the numerator and the denominator are always positive).
-====Related Provisions====
-{{eqderivanatomy}}