Template:Nutshell Equity Derivatives 1.44: Difference between revisions

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{{eqderivprov|1.44}}. '''{{eqderivprov|Knock-in Event}}'''. <br>
{{eqderivprov|1.44}}. '''{{eqderivprov|Knock-in Event}}'''. <br>
:(a) If “'''{{eqderivprov|Knock-in Event}}'''” applies, a party’s right to exercise an {{eqderivprov|Option}} under an {{eqderivprov|Transaction}} such {{eqderivprov|Option}} will be conditional upon the {{eqderivprov|Knock-in Event}} occurring on any {{eqderivprov|Knock-in Determination Day}} as of the time of such exercise and the parties’ respective rights and obligations will be altered from the occurrence of the {{eqderivprov|Knock-in Event}} as specified in the {{eqderivprov|Confirmation}}.
:(a) If “'''{{eqderivprov|Knock-in Event}}'''” applies, a party’s right to exercise an {{eqderivprov|Option}} under an {{eqderivprov|Option}} {{eqderivprov|Transaction}} will be conditional upon the {{eqderivprov|Knock-in Event}} existing when it is exercised on any {{eqderivprov|Knock-in Determination Day}}. The parties’ rights and obligations will be altered upon the such exercise as is specified in the {{eqderivprov|Confirmation}}.
:(b) “'''{{eqderivprov|Knock-in Event}}'''” must be specified in the {{eqderivprov|Confirmation}}. If it is not, but the {{eqderivprov|Confirmation}} specifies a {{eqderivprov|Knock-in Reference Security}} or a {{eqderivprov|Knock-in Price}}, the {{eqderivprov|Knock-in Event}} will occur where the specified {{eqderivprov|Knock-in Reference Security}} is also the specified {{eqderivprov|Index}}, {{eqderivprov|Share}} or {{eqderivprov|Basket}} where, on the {{eqderivprov|Trade Date}}:  
:(b) “'''{{eqderivprov|Knock-in Event}}'''” must be specified in the {{eqderivprov|Confirmation}}. If it is not, but the {{eqderivprov|Confirmation}} specifies a {{eqderivprov|Knock-in Price}} for a {{eqderivprov|Knock-in Reference Security}} that is also the specified {{eqderivprov|Underlier}} for that {{eqderivprov|Transaction}}, the {{eqderivprov|Knock-in Event}} will occur:  
::(i) The {{eqderivprov|Knock-in Price}} is greater than the initial level set for the {{eqderivprov|Transaction}} (however described), when the level of the {{eqderivprov|Knock-in Reference Security}}, as of the {{eqderivprov|Knock-in Valuation Time}} on any {{eqderivprov|Knock-in Determination Day}} is at least equal to the {{eqderivprov|Knock-in Price}}; and  
::(i) If the {{eqderivprov|Knock-in Price}} on the {{eqderivprov|Trade Date}} was ''higher'' than the initial level set for the {{eqderivprov|Transaction}}: when the {{eqderivprov|Knock-in Reference Security}}’s level at the {{eqderivprov|Knock-in Valuation Time}} on a {{eqderivprov|Knock-in Determination Day}} at least equals the {{eqderivprov|Knock-in Price}}; and  
::(ii) The {{eqderivprov|Knock-in Price}} is less than the initial level set for the {{eqderivprov|Transaction}} (however described), when the level of the {{eqderivprov|Knock-in Reference Security}} as of the {{eqderivprov|Knock-in Valuation Time}} on any {{eqderivprov|Knock-in Determination Day}} is at most equal to the {{eqderivprov|Knock-in Price}}.  
::(ii) If the {{eqderivprov|Knock-in Price}} on the {{eqderivprov|Trade Date}} was ''lower'' than the initial level set for the {{eqderivprov|Transaction}}: when the {{eqderivprov|Knock-in Reference Security}}‘s level at the {{eqderivprov|Knock-in Valuation Time}} on a {{eqderivprov|Knock-in Determination Day}} at most equals the {{eqderivprov|Knock-in Price}}.  
:If the parties cannot agree whether a {{eqderivprov|Knock-in Event}} has occurred, the {{eqderivprov|Calculation Agent}} will decide. <br>
:If the parties cannot agree whether a {{eqderivprov|Knock-in Event}} has occurred, the {{eqderivprov|Calculation Agent}} will decide. <br>

Latest revision as of 08:02, 14 May 2022

1.44. Knock-in Event.

(a) If “Knock-in Event” applies, a party’s right to exercise an Option under an Option Transaction will be conditional upon the Knock-in Event existing when it is exercised on any Knock-in Determination Day. The parties’ rights and obligations will be altered upon the such exercise as is specified in the Confirmation.
(b) “Knock-in Event” must be specified in the Confirmation. If it is not, but the Confirmation specifies a Knock-in Price for a Knock-in Reference Security that is also the specified Underlier for that Transaction, the Knock-in Event will occur:
(i) If the Knock-in Price on the Trade Date was higher than the initial level set for the Transaction: when the Knock-in Reference Security’s level at the Knock-in Valuation Time on a Knock-in Determination Day at least equals the Knock-in Price; and
(ii) If the Knock-in Price on the Trade Date was lower than the initial level set for the Transaction: when the Knock-in Reference Security‘s level at the Knock-in Valuation Time on a Knock-in Determination Day at most equals the Knock-in Price.
If the parties cannot agree whether a Knock-in Event has occurred, the Calculation Agent will decide.
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