Equity Notional Amount - Equity Derivatives Provision: Difference between revisions

Revision as of 18:10, 14 December 2015

It is different to the Initial Price in that Initial Price is expressed as a price per Share, whereas the Equity Notional Amount tends to be Initial Price * Number of Shares.

5.10 is the "Equity Notional Reset". The Equity Notional Reset is a feature for automatically restriking the Equity Notional Amount to the prevailing value of the Equity Notional Amount. It has the effect of converting posted collateral - which for financial institutions may suffer a punitive capital treatment - into absolutely paid amounts.
10.1 is Re-investment of Dividends - wherein declared and paid dividends are not manufactured out but rolled up and added to the Equity Notional Amount.
11 is Adjustments and Modifications.

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 {{eqderivsnap|1.24}}
 ====Commentary====
+It is different to the {{eqderivprov|Initial Price}} in that {{eqderivprov|Initial Price}} is expressed as a price ''per {{eqderivprov|Share}}'', whereas the {{eqderivprov|Equity Notional Amount}} tends to be {{eqderivprov|Initial Price}} * {{eqderivprov|Number of Shares}}.
 *{{eqderivprov|5.10}} is the "{{eqderivprov|Equity Notional Reset}}". The {{eqderivprov|Equity Notional Reset}} is a feature for automatically restriking the {{eqderivprov|Equity Notional Amount}} to the prevailing value of the {{eqderivprov|Equity Notional Amount}}. It has the effect of converting posted collateral - which for financial institutions may suffer a punitive capital treatment - into absolutely paid amounts.
 *{{eqderivprov|10.1}} is {{eqderivprov|Re-investment of Dividends}} - wherein declared and paid dividends are not manufactured out but rolled up and added to the {{eqderivprov|Equity Notional Amount}}.