Template:M summ Equity Derivatives 1.12: Difference between revisions

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Now back in the day counterpartiers exchasnged long-form conformations starting out Dear Ladies and Gentlemen, and cleaved to a long and tedious form, but in {{eqderiv}} world it quickly became apparent this was quite the waste of trees: equity derivatives tend to be vanilla, delta-one and traded in high volumes.  
====Section {{eqderivprov|1.12}} {{eqderivprov|Confirmations}}====
[[Confirmation - Equity Derivatives Provision|Now]] back in the day, counterparties exchanged [[long-form confirmation|long-form conformations]] starting out “Dear Ladies and Gentlemen”, and cleaved to a long and tedious form, but in the quick-fire [[High-frequency trading|HFT]] world of {{eqderiv}} it quickly became apparent this was quite the waste of trees: {{eqderivprov|Transaction}}s tend to be vanilla, [[delta-one]] and traded in high volumes.  


Thus ISDA-sponsored [[master confirmation]]s quickly emerged, allowing parties to agree general terms up front, so the process of confirming was nothing more than a spreadsheet or xml file exchanged at the end of each day.
Thus, ISDA-sponsored “[[master confirmation]]s” quickly emerged — sort of intermediate steps between a [[Schedule - ISDA Provision|Schedule]] and a trade {{isdaprov|Confirmation}} allowing parties to agree general terms up front, so the process of confirming was nothing more than a spreadsheet or .xml file exchanged at the end of each day.


In the prime brokerage space, the parties developed their own synthetic equity swap master conformations — somewhat more bespoke than the ISDA MCs, with a further level of standardisations of currencies and tenors, designed to replicate cash equity trading as nearly as possible.
[[Prime broker]]s developed their own [[synthetic equity swap]] [[master confirmation]]s — somewhat more bespoke than the ISDA MCs, with a further level of standardisation of currencies and tenors, designed to replicate [[cash equity]] trading as nearly as possible.


All of these things count as {{eqderivprov|Confirmation}}s. No doubt some bright spark will try to do something one day on a [[blockchain]].
All of these things count as {{eqderivprov|Confirmation}}s. No doubt some bright spark will try to do something one day on a [[blockchain]]. What is that? Oh, yes, sorry — not blockchain: [[ChatGPT]]. Keep up at the back.

Latest revision as of 02:18, 15 August 2023

Section 1.12 Confirmations

Now back in the day, counterparties exchanged long-form conformations starting out “Dear Ladies and Gentlemen”, and cleaved to a long and tedious form, but in the quick-fire HFT world of Equity Derivatives it quickly became apparent this was quite the waste of trees: Transactions tend to be vanilla, delta-one and traded in high volumes.

Thus, ISDA-sponsored “master confirmations” quickly emerged — sort of intermediate steps between a Schedule and a trade Confirmation allowing parties to agree general terms up front, so the process of confirming was nothing more than a spreadsheet or .xml file exchanged at the end of each day.

Prime brokers developed their own synthetic equity swap master confirmations — somewhat more bespoke than the ISDA MCs, with a further level of standardisation of currencies and tenors, designed to replicate cash equity trading as nearly as possible.

All of these things count as Confirmations. No doubt some bright spark will try to do something one day on a blockchain. What is that? Oh, yes, sorry — not blockchain: ChatGPT. Keep up at the back.

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