Equity Notional Amount - Equity Derivatives Provision: Difference between revisions

From The Jolly Contrarian
Jump to navigation Jump to search
No edit summary
No edit summary
Line 4: Line 4:
*{{eqderivprov|10.1}} is {{eqderivprov|Re-investment of Dividends}} - wherein declared and paid dividends are not manufactured out but rolled up and added to the {{eqderivprov|Equity Notional Amount}}.
*{{eqderivprov|10.1}} is {{eqderivprov|Re-investment of Dividends}} - wherein declared and paid dividends are not manufactured out but rolled up and added to the {{eqderivprov|Equity Notional Amount}}.
*{{eqderivprov|11}}  is {{eqderivprov|Adjustments and Modifications}}.
*{{eqderivprov|11}}  is {{eqderivprov|Adjustments and Modifications}}.
{{seealso}}
{{sa}}
{{how Equity Notional Reset works}}
{{how Equity Notional Reset works}}
{{eqderivanatomy}}
{{eqderivanatomy}}

Revision as of 11:19, 18 January 2020

Template:Eqderivanat It is different to the Initial Price in that Initial Price is expressed as a price per Share, whereas the Equity Notional Amount tends to be Initial Price * Number of Shares.

See also

How Equity Notional Reset works

Strap yourselves in, kids!

A beginner’s guide to the complex and tortuous world of what happens when your Equity Notional Amount is subject to Equity Notional Reset.

The short version’s really quite easy: You just restrike the trade at the market value, and pay out the difference in the value of the underlier over the reset period. As follows:

The long version’s a bit of a ball-breaker:

It’s like converting a posted variation margin into an absolute obligation by restriking the Transaction. Template:Eqderivanatomy