Multiple Exercise - Equity Derivatives Provision

2002 ISDA Equity Derivatives Definitions A Jolly Contrarian owner’s manual™ Resources and navigation Resources About the Equity Derivatives Definitions | (full wikitext) | (nutshell wikitext) | Equity v credit derivatives showdown Hot topics Synthetic Prime Brokerage Anatomy | The Triple Cocktail | Cancellation and Payment | Calculation Agent Resources About the Equity Derivatives Definitions | (full wikitext) | (nutshell wikitext) | Equity v credit derivatives showdown Hot topics Synthetic Prime Brokerage Anatomy | The Triple Cocktail | Cancellation and Payment | Calculation Agent TOC | 1 General Definitions | 2 Option Transactions | 3 Exercise of Options | 4 Forward Transactions | 5 Equity Swap Transactions | 6 Valuation | 7 Settlement | 8 Cash Settlement | 9 Physical Settlement | 10 Dividends | 11 Adjustments and Modifications | 12 Extraordinary Events · 12.8 Cancellation Amount · 12.9 Additional Disruption Events · 12.9 List of ADEs · 12.9(b) Consequences of ADEs | 13 Miscellaneous Index: Click ᐅ to expand: Equity Derivatives - Premium Synthetic Prime Brokerage Section 3.3 in a Nutshell™ Use at your own risk, campers! 3.3. Multiple Exercise. 3.3(a) If “Multiple Exercise” applies to an American Option or a Bermuda Option, Buyer may exercise any part of the unexercised Options on any Scheduled Trading Day during the Exercise Period but may not exercise fewer than the Minimum Number of Options or more than the Maximum Number of Options on any one Scheduled Trading Day, and where an “Integral Multiple” is specified, only in that Integral Multiple. An attempted exercise on any Scheduled Trading Day of: (i) more than the Maximum Number of Options will be treated as an exercise of the Maximum Number of Options only (and the excess will remain unexercised); (ii) fewer than the Minimum Number of Options will be ineffective; and (iii) an amount of Options that is not in the Integral Multiple will be rounded down to the next lowest Integral Multiple (and the excess will remain unexercised). 3.3(b) Clean-up exercise: In any case, Buyer may exercise any number of Options that does not exceed the Maximum Number of Options provided that is all the remaining unexercised Options on any Exercise Date and, on the Expiration Date, all unexercised Options. 3.3(c) “Minimum Number of Options” will be specified in the Option Transaction Confirmation where Multiple Exercise applies. 3.3(d) “Maximum Number of Options” will be specified in the Option Transaction Confirmation where Multiple Exercise applies. view template Full text of Section 3.3 Section 3.3. Multiple Exercise. 3.3(a) If “Multiple Exercise” is specified to be applicable to an American Option or a Bermuda Option, Buyer may exercise all or less than all the unexercised Options on one or more Scheduled Trading Days during the Exercise Period but (except as set forth below) on any such Scheduled Trading Day may not exercise less than the Minimum Number of Options or more than the Maximum Number of Options and, if a number is specified as the “Integral Multiple” in the related Confirmation, the number of exercised Options must be equal to, or be an integral multiple of, the number so specified. Except as set forth below, any attempt to exercise on any such Scheduled Trading Day: (i) more than the Maximum Number of Options will be deemed to be an exercise of the Maximum Number of Options (the number of Options exceeding the Maximum Number of Options being deemed to remain unexercised); (ii) less than the Minimum Number of Options will be ineffective; and (iii) an amount of Options not equal to or an integral multiple of the Integral Multiple will be deemed to be an exercise of a number of Options equal to the next lowest integral multiple of the Integral Multiple (the number of Options exceeding that number being deemed to remain unexercised). 3.3(b) Notwithstanding the foregoing, on any such Scheduled Trading Day Buyer may exercise any number of Options that does not exceed the Maximum Number of Options if it exercises all the Options remaining unexercised. On the Expiration Date, Buyer may exercise any number of Options remaining unexercised. 3.3(c) “Minimum Number of Options” means, in respect of an Option Transaction to which Multiple Exercise is applicable, the number specified as such in the related Confirmation. 3.3(d) “Maximum Number of Options” means, in respect of an Option Transaction to which Multiple Exercise is applicable, the number specified as such in the related Confirmation. view template Tell me more Sign up for our newsletter — or just get in touch: for ½ a weekly 🍺 you get to consult JC. Ask about it here.

Content and comparisons

Article 3 Exercise of Options

Section 3.1. General Terms Relating to Exercise

3.1(a) Exercise Period
3.1(b) Exercise Date
3.1(c) Potential Exercise Date
3.1(d) Latest Exercise Time
3.1(e) Expiration Time
3.1(f) Expiration Date

Section 3.3. Multiple Exercise

“Multiple Exercise” crops up in a number of places in the extended ISDA Universe. The canonical definition is “Multiple Exercise” in the 2021 ISDA Interest Rate Derivatives Definitions, but it also shows up in the 2002 ISDA Equity Derivatives Definitions (Multiple Exercise) and the ISDA EU Emissions Annex (Multiple Exercise), in each case getting to the same point, but in marginally different language.

Section 3.4. Automatic Exercise

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Summary

“...may not exercise less than the Minimum Number of Options”? Oh, ISDA’s crack drafting squad™, how could you?

It’s fewer.

Eheu.

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See also

• Exercise of Options generally under Section 3.
• Crack drafting squad
• Stockholm syndrome

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