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| {{eqderivprov|Equity Amount}}s, then. Straightforward enough: Take your {{eqderivprov|Equity Notional Amount}} — helpfully filled out in the {{eqderivprov|Confirmation}} — multiply it by the {{eqderivprov|Rate of Return}}, being the performance of the underlying share over the period in question — and there’s your number.
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| ===The basics: a worked example.===
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| Let’s put some numbers on this, because, as with many of the finer creations of {{icds}}, there is quite a lot of buried technology in there to unpack.
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| The first component is the '''{{eqderivprov|Rate of Return}}'''. This is a calculation of the performance of the {{eqderivprov|Share}} over the period, times a {{eqderivprov|Multiplier}} which might apply if you are doing some kind of kooky [[leverage|leveraged]] trade, but more likely will account for capital gains or [[stamp duty]] payabel by the broker on the underlying [[Hedge Position - Equity Derivatives Provision|hedge]] — so you might expect something like 85%. But that makes the mathematics too complicated for this old fellow, so let’s call the {{eqderivprov|Multiplier}} 100% and say the {{eqderivprov|Initial Price}} is100.
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| Let’s do two scenarios: where the stock has gone ''up'' — here say the {{eqderivprov|Final Price}} is 105, and where the stock has gone ''down'' — here, say the {{eqderivprov|Final Price}} is 95.
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| The {{eqderivprov|Rate of Return}} formula is ''({{eqderivprov|Final Price}} - {{eqderivprov|Initial Price}})/{{eqderivprov|Initial Price}}) * {{eqderivprov|Multiplier}}'', which works out as:
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| *Where the stock went ''up'': (105-100)/100 * 100% = 5/100 = {{font colour|green|+5%}}.
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| *Where the stock went ''down'': (95-100)/100 * 100% = -5/100 = {{font colour|red|-5%}}.
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| Now to calculate your {{eqderivprov|Equity Amount}}, we take the {{eqderivprov|Equity Notional Amount}} (for ease of calculation, shall we call this 1,000,000?) and times it by the {{eqderivprov|Rate of Return}}:
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| *Where the stock went ''up'': 1,000,000 * {{font colour|green|+5%}} = {{font colour|green|+50,000}}.
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| *Where the stock went ''down'': 1,000,000 * {{font colour|red|-5%}} = {{font colour|red|-50,000}}.
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| ===Shorts, longs and flewxi-transactions===
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| Now as you know, the {{isdama}} is a bilateral construct — In a funny way, a bit [[Bob Cunis]] like that — and while the [[equity derivatives]] market is largely conducted between dealers and thThis doesn't mean the dealer is always the {{eqderivprov|Equity Amount Payer}}. The client — as often as not, a [[hedge fund]] — is as likely to be taking a [[short]] position — locusts, right? — as a [[long one]]. One does this by reversing the roles of the parties in the {{eqderivprov|Confirmation}}: The {{eqderivprov|Equity Amount Payer}} for a ''long'' transaction will be a [[Swap dealer|dealer]]. The equity amount payer for a ''short'' transaction will be the [[Hedge fund|fund]].
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| So much so uncontroversial. But then there are flexi-transactions: in these modern times of [[high-frequency trading]], [[unique transaction identifier]]s and trade and transaction reporting, [[dealer]]s and their clients are increasingly interested in consolidating the multiple trade impulses on the same underlyer they have each day into single positions and single transactions: this makes reconciling reporting far easier, and also means you don’t have to be assigning thousands of [[UTI]]s every day — at a couple of bucks a throw — to what is effectively a single stock position.
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| What does this have to do with {{eqderivprov|Equity Notional Amount}}s? Well the {{eqderivprov|Equity Notional Amount}} of that single “position” transaction is now a moving target. A ''short'' trade impulse on a (larger) existing long position will reduce the Equity Notional Amount, but it won’t necessarily change who is the {{eqderivprov|Equity Amount Payer}}, ''unless the total notional of the position flips from positive to negative.
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