Template:Extraordinary events capsule: Difference between revisions
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Amwelladmin (talk | contribs) Created page with "Break these '''“{{eqderivprov|Extraordinary Events}}”''' into four categories: *'''Corporate action thingies''': (generally) benign but unscheduled matters of corporat..." |
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Break these '''“{{eqderivprov|Extraordinary Events}}”''' into four categories: | Break these '''“{{eqderivprov|Extraordinary Events}}”''' into four categories: | ||
*'''[[Corporate action]] thingies''': (generally) benign but unscheduled matters of corporate structure concerning the management of specific underlying {{eqderivprov|Shares}}, that change the economic proposition represented by those {{eqderivprov|Shares}}, and not the [[equity derivative]] contract. So: {{eqderivprov|Merger Event}}s and {{eqderivprov|Tender Offer}}s; | *'''[[Corporate action]] thingies''': (generally) benign but unscheduled matters of corporate structure concerning the management of specific underlying {{eqderivprov|Shares}}, that change the economic proposition represented by those {{eqderivprov|Shares}}, and not the [[equity derivative]] contract. So: {{eqderivprov|Merger Event}}s and {{eqderivprov|Tender Offer}}s; | ||
*'''[[Index Adjustment Event - Equity Derivatives Provision|Index adjustments]]''': Equivalent measures that relate to an underlying {{eqderivprov|Index}} - collectively {{eqderivprov|Index Adjustment | *'''[[Index Adjustment Event - Equity Derivatives Provision|Index adjustments]]''': Equivalent measures that relate to an underlying {{eqderivprov|Index}} - collectively {{eqderivprov|Index Adjustment Event}}s. So: | ||
:* | :*''{{eqderivprov|Index Modification}}'': Changes in the calculation methodology for the {{eqderivprov|Index}} | ||
:* | :*''{{eqderivprov|Index Cancellation}}'': Where {{eqderivprov|Index}}es are discontinued with replacement; | ||
:* | :*''{{eqderivprov|Index Disruption}}'': disruption in the calculation and publication of {{eqderivprov|Index}} values; | ||
*'''Negative ''external'' events relating to underlying {{eqderivprov|Issuer}}s''': {{eqderivprov|Nationalization}}s, {{eqderivprov|Insolvency}}, {{eqderivprov|Delisting}} of underlying {{eqderivprov|Issuer}}s; | *'''Negative ''external'' events relating to underlying {{eqderivprov|Issuer}}s''': {{eqderivprov|Nationalization}}s, {{eqderivprov|Insolvency}}, {{eqderivprov|Delisting}} of underlying {{eqderivprov|Issuer}}s; | ||
*'''Matters impeding the parties in performing and hedging the Transaction''': These oftebn do have some crossover with the events above, but the emphasis here is (for the most part) on their direct impact on the parties’ respective abilities to perform and risk manage the Transaction. So, the Triple Cocktail of Chain in Law, Hedging Disruption and Increased Cost of Hedging; the specific issues relating to short-selling (Loss of Stock Borrow and Increased Cost of Stock Borrow) and then two random ones that don’t brilliantly fit with this theory, but which people tend to disapply — possibly for this exact reason, but possibly because they are largely covered by the Triple Cocktail anyway — namely {{eqderivprov|Failure to Deliver}} and, even more weirdly, {{eqderivprov|Insolvency Filing}}. <br> | *'''Matters impeding the parties in performing and hedging the Transaction''': These oftebn do have some crossover with the events above, but the emphasis here is (for the most part) on their direct impact on the parties’ respective abilities to perform and risk manage the Transaction. So, the Triple Cocktail of Chain in Law, Hedging Disruption and Increased Cost of Hedging; the specific issues relating to short-selling (Loss of Stock Borrow and Increased Cost of Stock Borrow) and then two random ones that don’t brilliantly fit with this theory, but which people tend to disapply — possibly for this exact reason, but possibly because they are largely covered by the Triple Cocktail anyway — namely {{eqderivprov|Failure to Deliver}} and, even more weirdly, {{eqderivprov|Insolvency Filing}}. <br> | ||
Revision as of 14:13, 27 March 2020
Break these “Extraordinary Events” into four categories:
- Corporate action thingies: (generally) benign but unscheduled matters of corporate structure concerning the management of specific underlying Shares, that change the economic proposition represented by those Shares, and not the equity derivative contract. So: Merger Events and Tender Offers;
- Index adjustments: Equivalent measures that relate to an underlying Index - collectively Index Adjustment Events. So:
- Index Modification: Changes in the calculation methodology for the Index
- Index Cancellation: Where Indexes are discontinued with replacement;
- Index Disruption: disruption in the calculation and publication of Index values;
- Negative external events relating to underlying Issuers: Nationalizations, Insolvency, Delisting of underlying Issuers;
- Matters impeding the parties in performing and hedging the Transaction: These oftebn do have some crossover with the events above, but the emphasis here is (for the most part) on their direct impact on the parties’ respective abilities to perform and risk manage the Transaction. So, the Triple Cocktail of Chain in Law, Hedging Disruption and Increased Cost of Hedging; the specific issues relating to short-selling (Loss of Stock Borrow and Increased Cost of Stock Borrow) and then two random ones that don’t brilliantly fit with this theory, but which people tend to disapply — possibly for this exact reason, but possibly because they are largely covered by the Triple Cocktail anyway — namely Failure to Deliver and, even more weirdly, Insolvency Filing.