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Template:M summ Equity Derivatives 8.7: Difference between revisions
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Template:M summ Equity Derivatives 8.7 (view source)
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*'''Where the stock went ''down''''': USD1,000,000 * {{font colour|red|-5%}} = USD{{font colour|red|-50,000}}. | *'''Where the stock went ''down''''': USD1,000,000 * {{font colour|red|-5%}} = USD{{font colour|red|-50,000}}. | ||
===Shorts, longs and flexi-transactions=== | ===Shorts, longs and flexi-transactions=== | ||
Now as you know, the {{isdama}} is a bilateral construct — In a funny way, a bit [[Bob Cunis]] like that — and while the [[equity derivatives]] market is largely conducted between dealers and their clients, this doesn’t mean the [[dealer]] is always the {{eqderivprov|Equity Amount Payer}}. The client — as often as not, a [[hedge fund]] — is as likely to be taking a [[short]] position — [[locusts]], right? — as a [[long | Now as you know, the {{isdama}} is a bilateral construct — In a funny way, a bit [[Bob Cunis]] like that — and while the [[equity derivatives]] market is largely conducted between dealers and their clients, this doesn’t mean the [[dealer]] is always the {{eqderivprov|Equity Amount Payer}}. The client — as often as not, a [[hedge fund]] — is as likely to be taking a [[short]] position — [[locusts]], right? — as a [[long]] one. One does this by reversing the roles of the parties in the {{eqderivprov|Confirmation}}: The {{eqderivprov|Equity Amount Payer}} for a ''[[long]]'' transaction will be a [[Swap dealer|dealer]]. The {{eqderivprov|Equity Amount Payer}} for a ''[[short]]'' transaction will be the [[Hedge fund|fund]]. | ||
So much so uncontroversial. But then there are flexi-transactions: in these modern times of [[high-frequency trading]], [[unique transaction identifier]]s and [[Trade reporting|trade]] and [[transaction reporting]], [[dealer]]s and their clients are increasingly interested in consolidating the multiple trade impulses they have on the same underlyer into single positions and single transactions: this makes reconciling reporting far easier, and also means you don’t have to be assigning thousands of [[UTI]]s every day — at a couple of bucks a throw — to what is effectively a single stock position. | So much so uncontroversial. But then there are flexi-transactions: in these modern times of [[high-frequency trading]], [[unique transaction identifier]]s and [[Trade reporting|trade]] and [[transaction reporting]], [[dealer]]s and their clients are increasingly interested in consolidating the multiple trade impulses they have on the same underlyer into single positions and single transactions: this makes reconciling reporting far easier, and also means you don’t have to be assigning thousands of [[UTI]]s every day — at a couple of bucks a throw — to what is effectively a single stock position. | ||