Effective Date - ISDA Definition: Difference between revisions

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{{isdadefsanat|3.2}}
{{nman|isdadefs||Effective Date}}
The day when everything starts for real on a {{isdaprov|Transaction}} — at which point payments start happening, {{isdadefsprov|Calculation Period}} begin to run and so on. To be contrasted with the {{isdadefsprov|Trade Date}}, being the date when traded and went “on risk” — at that point you struck your prices ([[Initial Price - Equity Derivatives Provision|Initial Price]], [[Strike Price - Equity Derivatives Provision|Strike Price]], so on).
 
So the sequence is {{isdadefsprov|Trade Date}}, {{isdadefsprov|Effective Date}} —  — and {{isdadefsprov|Termination Date}}.

Latest revision as of 16:44, 19 July 2024

ISDA Definitions
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Effective Date in a Nutshell

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Original text

2006

3.2. Effective Date. “Effective Date” means, in respect of a Swap Transaction, the date specified as such in the related Confirmation, which date is the first day of the Term of the Swap Transaction. The Effective Date shall not be subject to adjustment in accordance with any Business Day Convention unless the parties specify in the related Confirmation that the Effective Date will be adjusted in accordance with a specified Business Day Convention.

2021

2021 ISDA Interest Rate Derivatives Definitions ???

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Comparisons

Amazing how many words you can contrive to take to say nothing when you put your mind to it. The first day of your Transaction. Thanks for writing in, ISDA.

Basics

The Effective Date is the day when everything starts for real on a Transaction — at which point payments start happening, Calculation Period begin to run and so on. To be contrasted with the Trade Date, being the date when traded and went “on risk” — at that point you struck your prices (Initial Price, Strike Price, so on).

So the sequence is Trade Date, Effective Date — — and Termination Date.

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See also

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References