Template:Nutshell Equity Derivatives 8.4: Difference between revisions
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{{eqderivprov|8.4}}. '''{{eqderivprov|Cash Settlement of Forward Transactions}}'''. For each {{eqderivprov|Cash Settlement Payment Date}} under a {{eqderivprov|Cash-settled}} {{eqderivprov|Forward Transaction}}: <br> | |||
:(a) if “'''{{eqderivprov|Prepayment}}'''” | :(a) if “'''{{eqderivprov|Prepayment}}'''” does not apply: <br> | ||
::(i) | ::(i) where the {{eqderivprov|Forward Cash Settlement Amount}} is positive, {{eqderivprov|Seller}} will pay it to {{eqderivprov|Buyer}} on the {{eqderivprov|Cash Settlement Payment Date}}; and <br> | ||
::(ii) if | ::(ii) if {{eqderivprov|Forward Cash Settlement Amount}} is negative, then {{eqderivprov|Buyer}} will pay its absolute value to {{eqderivprov|Seller}} on the {{eqderivprov|Cash Settlement Payment Date}}; and <br> | ||
:(b) if “'''{{eqderivprov|Prepayment}}'''” | :(b) if “'''{{eqderivprov|Prepayment}}'''” applies, {{eqderivprov|Seller}} will pay {{eqderivprov|Buyer}} ''{{eqderivprov|Forward Cash Settlement Amount}} + any {{eqderivprov|Excess Dividend Amount}}'' on the {{eqderivprov|Cash Settlement Payment Date}}. <br> | ||
Latest revision as of 16:45, 11 May 2022
8.4. Cash Settlement of Forward Transactions. For each Cash Settlement Payment Date under a Cash-settled Forward Transaction:
- (a) if “Prepayment” does not apply:
- (i) where the Forward Cash Settlement Amount is positive, Seller will pay it to Buyer on the Cash Settlement Payment Date; and
- (ii) if Forward Cash Settlement Amount is negative, then Buyer will pay its absolute value to Seller on the Cash Settlement Payment Date; and
- (i) where the Forward Cash Settlement Amount is positive, Seller will pay it to Buyer on the Cash Settlement Payment Date; and
- (b) if “Prepayment” applies, Seller will pay Buyer Forward Cash Settlement Amount + any Excess Dividend Amount on the Cash Settlement Payment Date.