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Template:Nutshell Equity Derivatives 3.4: Difference between revisions
Template:Nutshell Equity Derivatives 3.4 (view source)
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Section {{eqderivprov|3.4}}. '''{{eqderivprov|Automatic Exercise}}'''. If “'''{{eqderivprov|Automatic Exercise}}'''” | Section {{eqderivprov|3.4}}. '''{{eqderivprov|Automatic Exercise}}'''. If “'''{{eqderivprov|Automatic Exercise}}'''” applies to an {{eqderivprov|Option Transaction}} then (unless, by the {{eqderivprov|Expiration Time}} on the {{eqderivprov|Expiration Date}} {{eqderivprov|Buyer}} notifies {{eqderivprov|Seller}} that {{eqderivprov|Automatic Exercise}} should not occur) each unexercised {{eqderivprov|Option}} will be automatically exercised: <br> | ||
:{{eqderivprov|3.4(a)}} | :{{eqderivprov|3.4(a)}} '''{{eqderivprov|Cash Settlement}}''': at the {{eqderivprov|Expiration Time}} on the {{eqderivprov|Expiration Date}}; and <br> | ||
:{{eqderivprov|3.4(b)}} | :{{eqderivprov|3.4(b)}} '''{{eqderivprov|Physical Settlement}}''': if the {{eqderivprov|Calculation Agent}} determines the {{eqderivprov|Option}} to be {{eqderivprov|In-the-Money}} at such time, as at the {{eqderivprov|Expiration Time}} on the {{eqderivprov|Expiration Date}}. | ||
:{{eqderivprov|3.4(c)}} “'''{{eqderivprov|In-the-Money}}'''” means | :{{eqderivprov|3.4(c)}} “'''{{eqderivprov|In-the-Money}}'''” means | ||
::(i) | ::(i) for a {{eqderivprov|Call}}, that | ||
::(ii) in respect of a {{eqderivprov|Put}}, that (A) the Reference Price is equal to or less than the price for a Share at which any {{eqderivprov|Related Exchange}} would automatically exercise a {{eqderivprov|Physically-settled}} option with the {{eqderivprov|Strike Price}} relating to such Share, or (B) if no options relating to such Share are listed on any {{eqderivprov|Related Exchange}} or no {{eqderivprov|Related Exchange}} is specified in the related {{eqderivprov|Confirmation}}, the Reference Price is less than the {{eqderivprov|Strike Price}}. | :::(A) the {{eqderivprov|Reference Price}} is equal to or greater than the price for a {{eqderivprov|Share}} at which any {{eqderivprov|Related Exchange}} would automatically exercise a {{eqderivprov|Physically-settled}} option with the {{eqderivprov|Strike Price}} relating to such {{eqderivprov|Share}}, or | ||
:::(B) if no options relating to such {{eqderivprov|Share}} are listed on any {{eqderivprov|Related Exchange}} or no {{eqderivprov|Related Exchange}} is specified in the related {{eqderivprov|Confirmation}}, the Reference Price is greater than the {{eqderivprov|Strike Price}}; and | |||
::(ii) in respect of a {{eqderivprov|Put}}, that | |||
:::(A) the {{eqderivprov|Reference Price}} is equal to or less than the price for a {{eqderivprov|Share}} at which any {{eqderivprov|Related Exchange}} would automatically exercise a {{eqderivprov|Physically-settled}} option with the {{eqderivprov|Strike Price}} relating to such {{eqderivprov|Share}}, or | |||
:::(B) if no options relating to such {{eqderivprov|Share}} are listed on any {{eqderivprov|Related Exchange}} or no {{eqderivprov|Related Exchange}} is specified in the related {{eqderivprov|Confirmation}}, the {{eqderivprov|Reference Price}} is less than the {{eqderivprov|Strike Price}}. | |||
:{{eqderivprov|3.4(d)}} “'''{{eqderivprov|Reference Price}}'''” means the price per {{eqderivprov|Share}} or amount per {{eqderivprov|Basket}} determined as provided in the related {{eqderivprov|Confirmation}} as of the {{eqderivprov|Expiration Time}} on the {{eqderivprov|Expiration Date}} or, if no means of determining such price or amount are so provided, in respect of a {{eqderivprov|Share Option Transaction}}, the {{eqderivprov|Relevant Price}} of the Share (for which purpose the {{eqderivprov|Valuation Time}} and the {{eqderivprov|Valuation Date}} will be the {{eqderivprov|Expiration Time}} and the {{eqderivprov|Expiration Date}}, respectively) and, in respect of a {{eqderivprov|Share Basket Option Transaction}}, the sum of the values calculated as of the {{eqderivprov|Expiration Time}} on the {{eqderivprov|Expiration Date}} for the {{eqderivprov|Shares}} of each {{eqderivprov|Issuer}} as the product of the {{eqderivprov|Relevant Price}} of such Share (for which purpose the {{eqderivprov|Valuation Time}} and the {{eqderivprov|Valuation Date}} will be the {{eqderivprov|Expiration Time}} and the {{eqderivprov|Expiration Date}}, respectively) and the relevant {{eqderivprov|Number of Shares}} comprised in the {{eqderivprov|Basket}}. <br> | :{{eqderivprov|3.4(d)}} “'''{{eqderivprov|Reference Price}}'''” means the price per {{eqderivprov|Share}} or amount per {{eqderivprov|Basket}} determined as provided in the related {{eqderivprov|Confirmation}} as of the {{eqderivprov|Expiration Time}} on the {{eqderivprov|Expiration Date}} or, if no means of determining such price or amount are so provided, in respect of a {{eqderivprov|Share Option Transaction}}, the {{eqderivprov|Relevant Price}} of the Share (for which purpose the {{eqderivprov|Valuation Time}} and the {{eqderivprov|Valuation Date}} will be the {{eqderivprov|Expiration Time}} and the {{eqderivprov|Expiration Date}}, respectively) and, in respect of a {{eqderivprov|Share Basket Option Transaction}}, the sum of the values calculated as of the {{eqderivprov|Expiration Time}} on the {{eqderivprov|Expiration Date}} for the {{eqderivprov|Shares}} of each {{eqderivprov|Issuer}} as the product of the {{eqderivprov|Relevant Price}} of such Share (for which purpose the {{eqderivprov|Valuation Time}} and the {{eqderivprov|Valuation Date}} will be the {{eqderivprov|Expiration Time}} and the {{eqderivprov|Expiration Date}}, respectively) and the relevant {{eqderivprov|Number of Shares}} comprised in the {{eqderivprov|Basket}}. <br> | ||