From The Jolly Contrarian
Jump to navigation
Jump to search
|
|
(2 intermediate revisions by the same user not shown) |
Line 1: |
Line 1: |
| {{eqderivsnap|5.8}}
| | #redirect[[Equity Swap Transactions - Equity Derivatives Provision]] |
| Used in {{eqderivprov|Rate of Return}}, whcih in turn is used in {{eqderivprov|Equity Amount}}. It is different to the Equity Notional Amount in that it is expressed as a price ''per {{eqderivprov|Share}}'', whereas the {{eqderivprov|Equity Notional Amount}} tends to be {{eqderivprov|Initial Price}} * {{eqderivprov|Number of Shares}}.
| |
| | |
| Note there is an ''initial'' {{eqderivprov|Initial Price}} — the strike price in the {{isdaprov|Confirmation}} — but it is reset on every {{eqderivprov|Valuation Date}} to the {{eqderivprov|Final Price}} on that date — so the {{eqderivprov|Initial Price}} fluctuates over time.
| |
| | |
| The way the {{eqderivprov|Initial Price}} definition is drafted, you don’t need to say “... subject to adjustment on each {{eqderivprov|Valuation Date}}” in the {{isdaprov|Confirmation}}, although for many of you this is sure to prove an irresistible temptation.
| |
| | |
| {{sa}}
| |
| *{{eqderivprov|Equity Notional Amount}}
| |
| *{{eqderivprov|Equity Notional Reset}}, the process by which your trade is re-struck on each {{eqderivprov|Valuation Date}}.
| |
Latest revision as of 12:55, 11 May 2022