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-An equity derivative is a derivative contract that references the performance of one or more equities, or equity indices. Where more than one {{eqderivprov|Share}} or {{eqderivprov|Index}} is referenced, the technical term is a {{eqderivprov|Basket}}.
+{{anat|eqderiv|{{Eqderiv short TOC}}}}Step this way into the world of [[synthetic equity swap]]s, [[contract for differences]], and all the manifold and beautiful ways uyou can take on, or lay off, exposure to a [[share]] or a [[Basket - Equity Derivatives Provision|basket]] without actually ''buying'' it. An [[equity derivative]] is a contract that ''references'' the performance of shares and share indices. They are most usually documented under {{eqdefs}}, so the place you should immediately visit is the [[JC]]’s [[Equity Derivatives Anatomy]].
-It is most usually documented under the {{eqdefs}}, and the place you should immediately visit is the [[Equity Derivatives Anatomy]].
+“High [[delta]]” [[equity derivatives]] that replicate, one-for-one, the economic effect of cash [[equities]] trading are often called “[[synthetic equity swaps]]” or “[[synthetic prime brokerage]]”.
-====Types of equity derivative====
+The starting assumption is that the underlying share already exists in the market: equity derivatives are a creature of the ''[[secondary market]]''. So there’s not a lot of chat here about initial public offerings, subscription agreements and all that sort of thing. So the sorts of rights an initial subscriber might have (the {{eqderivprov|Hedging Party}}) won’t automatically translate through to the holder of a synthetic exposure under an [[equity derivative]].
-*Equity {{eqderivprov|Swap}} contracts
+====Types of [[equity derivative]]====
+*[[Equity swap]] contracts, which are generally [[total return swap]]s and related [[index swap]] contracts
 *{{eqderivprov|Option}} contracts
 *{{eqderivprov|Forward}} contracts
+*[[Synthetic prime brokerage]]: [[delta-one]] exposure; a swap version of pure share brokerage.
+====Features====
+Equity derivatives reference the performance of the [[underlier]] over the term of the Transaction: The “{{eqderivprov|Final Price}}”) is divided by the “{{eqderivprov|Strike Price}}” (also known as “{{eqderivprov|Initial Price}}”) to yield a percentage.
+*A percentage of greater than 100% implies a ''positive'' return during {{eqderivprov|Transaction}}.
+*A percentage of less than 100% implies a ''negative'' return. You’re [[out-of-the-money]], soldier.
+===Key concepts===
+*'''{{eqderivprov|Strike Price}}''': the market price of the underlier at the {{eqderivprov|Trade Date}};
+*'''{{eqderivprov|Settlement Price}}''': the market price of the underlier at the {{eqderivprov|Termination Date}};
+*'''[[Barrier]]s''': above or below which the trade may knock in, knock out, or the settlement formula may adjust;
+*'''{{eqderivprov|Valuation}}''': on the {{eqderivprov|Settlement Date}}, the Settlement Price will be determined by reference to one or more {{eqderivprov|Valuation Date}}s, (if more than one, {{eqderivprov|Averaging}} may apply).
+====Market and Hedging disruption====
+*'''{{eqderivprov|Market Disruption}}''': Contingency plans need to be made for what to do where it is not possible to make a valuation on any day on which one might be required (these may occur periodically through the transaction, and may be daily).
+*'''{{eqderivprov|Hedging Disruption}}''': where the market is finctioning, but for some reason there are impediments to efficiently or legally hedging an exposure under an equity derivative.
-{{eqderivsanatomy}}
+{{sa}}
+*[[Contract for difference]]
+*[[Synthetic prime brokerage]]
+*[[Prime brokerage transactions]]