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Equity derivative: Difference between revisions
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{{anat|eqderiv}} | |||
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}}. | 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}}. | ||
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*'''{{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|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. | *'''{{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. | ||