Template:Equity swaps versus forwards: Difference between revisions
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Amwelladmin (talk | contribs) Created page with "===On the difference between {{eqderivprov|Final Price}} and {{eqderivprov|Relevant Price}}=== {{eqderivprov|Final Price}} is defined in Article {{eqderivprov|5}} of the {{eqd..." |
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===On the difference between {{eqderivprov|Final Price}} and {{eqderivprov|Relevant Price}}=== | ===On the difference between {{eqderivprov|Final Price}} and {{eqderivprov|Relevant Price}}=== | ||
{{eqderivprov|Final Price}} is defined in Article {{eqderivprov|5}} of the {{eqdefs}} and is germane therefore to {{eqderivprov|Equity Swap Transaction}}s only and not, say, {{eqderivprov|Forward Transaction}}s (which, circuitously, rely instead on {{eqderivprov|Relevant Price}}, albeit defined in a similar way). | {{eqderivprov|Final Price}} is defined in Article {{eqderivprov|5}} of the {{eqdefs}} and is germane therefore to {{eqderivprov|Equity Swap Transaction}}s only and not, say, {{eqderivprov|Forward Transaction}}s (which, circuitously, rely instead on {{eqderivprov|Relevant Price}}, albeit defined in a similar way). | ||
The {{eqderivprov|Final Price}} also has separately broken-out scenarios for {{eqderivprov|Basket}} {{eqderivprov|Transaction}}s (being just the weighted sums of the individual components in the basket). {{eqderivprov|Relevant Price}} doesn't bother to break these out — whether that is a function of the fact that Share Basket Forwards behave differently to Basket Swaps, or just because the drafting committee was losing the will to live, is a question to which we have not yet got to the bottom. Don’t hold your breath. | |||
Revision as of 11:06, 23 April 2019
On the difference between Final Price and Relevant Price
Final Price is defined in Article 5 of the 2002 ISDA Equity Derivatives Definitions and is germane therefore to Equity Swap Transactions only and not, say, Forward Transactions (which, circuitously, rely instead on Relevant Price, albeit defined in a similar way).
The Final Price also has separately broken-out scenarios for Basket Transactions (being just the weighted sums of the individual components in the basket). Relevant Price doesn't bother to break these out — whether that is a function of the fact that Share Basket Forwards behave differently to Basket Swaps, or just because the drafting committee was losing the will to live, is a question to which we have not yet got to the bottom. Don’t hold your breath.