Price Return - Equity Derivatives Provision: Difference between revisions

Revision as of 13:08, 16 April 2014

To be contrasted with Total Return. And Slight Return.

The Price Return returns only the price from time to time of the equity security, without taking into account any dividend distributions.

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 {{eqderivsnap|8.6(a)}}
 ====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.
+To be contrasted with {{eqderivprov|Total Return}}. And [http://en.wikipedia.org/wiki/Voodoo_Child_(Slight_Return) Slight Return].
+The {{eqderivprov|Price Return}} returns only the price from time to time of the equity security, without taking into account any dividend distributions.
-(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}}