Transaction - Equity Derivatives Provision

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2002 ISDA Equity Derivatives Definitions

A Jolly Contrarian owner’s manual™

1.1 in a Nutshell

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1.1 in all its glory

Section 1.1. Transaction. “Transaction” means an Option Transaction, a Forward Transaction, an Equity Swap Transaction or any other transaction in relation to which the related Confirmation incorporates these Definitions.

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Transaction” is also defined in the 2014 ISDA Credit Derivatives Definitionshere — the ISDA Emissions Annex - here — and of course the ISDA Master Agreementhere. Which is nice.



Enjoy the uncalled-for cognitive dissonance in that the Equity Derivatives definitions define Transaction — in a rather airy way — even though “Transaction” is already defined in the ISDA Master Agreement, in an equally airy way.


There isn’t a generic catch-all term for the underlier of an Equity Derivatives Transaction. This is a pity, since “Index, Share or Basket as the case may be” isn’t the most elegant expression in the annals of legal literature. You might have used “Instrument” or even “Underlier” might do.

Underlier” is a JC-spawned confection, and we do use it from time to time, when our patience with ISDA’s crack drafting squad™ and its leaden drafting becomes as shiny, thin and translucent as the seat of an old pair of suit trousers.


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  • The JC’s famous Nutshell summary of this clause

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See also