Basket - Equity Derivatives Provision: Difference between revisions
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Sort of like a mini-index, only static (but modifiable by agreement). In the context of [[delta-one]] [[equity derivatives]], there’s little difference between a {{eqderivprov|Basket}} and a collection of single {{eqderivprov|Share Swap Transaction}}s on the individual {{eqderivprov|Issuer}}s comprising the basket. You might ask why bother even having them, but if you wanted to trade a fixed block, and keep a single [[UTI]], it might make sense — for trading a modified version of a public index, for example. | Sort of like a mini-index, only static (but modifiable by agreement). In the context of [[delta-one]] [[equity derivatives]], there’s little difference between a {{eqderivprov|Basket}} and a collection of single {{eqderivprov|Share Swap Transaction}}s on the individual {{eqderivprov|Issuer}}s comprising the basket. You might ask why bother even having them, but if you wanted to trade a fixed block, and keep a single [[UTI]], it might make sense — for trading a modified version of a public index, for example. | ||
{{underlier}} | |||
Revision as of 10:30, 30 September 2019
Template:Eqderivanat Sort of like a mini-index, only static (but modifiable by agreement). In the context of delta-one equity derivatives, there’s little difference between a Basket and a collection of single Share Swap Transactions on the individual Issuers comprising the basket. You might ask why bother even having them, but if you wanted to trade a fixed block, and keep a single UTI, it might make sense — for trading a modified version of a public index, for example.
“Underlier”?: There isn’t a generic catch-all term for the underlier of an Equity Derivatives Transaction. This is a pity, since “Index, Share or Basket as the case may be” isn’t the most elegant expression in the annals of legal literature. You might have used “Instrument” or even “Underlier” might do.
“Underlier” is a JC-spawned confection, and we do use it from time to time, when our patience with ISDA’s crack drafting squad™ and its leaden drafting becomes as shiny, thin and translucent as the seat of an old pair of suit trousers.