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Equity Notional Reset - Equity Derivatives Provision: Difference between revisions
Equity Notional Reset - Equity Derivatives Provision (view source)
Revision as of 17:13, 7 April 2014
, 7 April 2014→Commentary
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The swap will reset automatically on each [[Cash Settlement Payment Date - Equity Derivatives Provision|Cash Settlement Payment Date]], (i.e., usually a {{eqderivprov|Settlement Cycle}} after each {{eqderivprov|Valuation Date}}). | The swap will reset automatically on each [[Cash Settlement Payment Date - Equity Derivatives Provision|Cash Settlement Payment Date]], (i.e., usually a {{eqderivprov|Settlement Cycle}} after each {{eqderivprov|Valuation Date}}). | ||
====Example==== | ====Example==== | ||
'''Let's say''': | {{quote|1='''Let's say''': | ||
*a swap is struck with an initial {{eqderivprov|Equity Notional Amount}} of £10m | *a swap is struck with an initial {{eqderivprov|Equity Notional Amount}} of £10m | ||
*the swap is now out of the money to Party A by £1mm. | *the swap is now out of the money to Party A by £1mm. | ||
| Line 19: | Line 18: | ||
'''Result''': instead of the swap being out of the money by £1mm and collaterased by that amount, the restruck swap has a MTM of 0 and neither party holds any collateral.}} | '''Result''': instead of the swap being out of the money by £1mm and collaterased by that amount, the restruck swap has a MTM of 0 and neither party holds any collateral.}} | ||
====Cash Settlement Mechanics generally==== | |||
{{cashsettlement}} | |||
===User Guide=== | ===User Guide=== | ||