Template:Equity swaps versus forwards: Difference between revisions
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===On the difference between | ====On the difference between Final Price and Relevant Price==== | ||
{{eqderivprov|Final Price}} is defined in Article {{eqderivprov|5}} of the {{eqdefs}} and is germane therefore to {{eqderivprov|Equity Swap Transaction}}s only and not, say, {{eqderivprov|Forward Transaction}}s (which, circuitously, rely instead on {{eqderivprov|Relevant Price}}, albeit defined in a similar way). | {{eqderivprov|Final Price}} is defined in Article {{eqderivprov|5}} of the {{eqdefs}} and is germane therefore to {{eqderivprov|Equity Swap Transaction}}s only and not, say, {{eqderivprov|Forward Transaction}}s (which, circuitously, rely instead on {{eqderivprov|Relevant Price}}, albeit defined in a similar way). | ||
The {{eqderivprov|Final Price}} also has separately broken-out scenarios for {{eqderivprov|Basket}} {{eqderivprov|Transaction}}s (being just the weighted sums of the individual components in the basket). {{eqderivprov|Relevant Price}} | The {{eqderivprov|Final Price}} also has separately broken-out scenarios for {{eqderivprov|Basket}} {{eqderivprov|Transaction}}s (being just the weighted sums of the individual components in the basket). {{eqderivprov|Relevant Price}} doesn’t bother to break these out — whether that is because [[Share Basket Forward Transaction - Equity Derivatives Provision|Share Basket Forwards]] behave differently to [[Basket Swap Transaction - Equity Derivatives Provision|Basket Swap]]s, or just because {{icds}} was losing the will to live, is a question to which we have yet to get to the bottom. | ||
Don’t hold your breath. | |||
Latest revision as of 17:02, 1 November 2024
On the difference between Final Price and Relevant Price
Final Price is defined in Article 5 of the 2002 ISDA Equity Derivatives Definitions and is germane therefore to Equity Swap Transactions only and not, say, Forward Transactions (which, circuitously, rely instead on Relevant Price, albeit defined in a similar way).
The Final Price also has separately broken-out scenarios for Basket Transactions (being just the weighted sums of the individual components in the basket). Relevant Price doesn’t bother to break these out — whether that is because Share Basket Forwards behave differently to Basket Swaps, or just because ISDA’s crack drafting squad™ was losing the will to live, is a question to which we have yet to get to the bottom.
Don’t hold your breath.