Template:M summ Equity Derivatives 12.8(b)

What to make of that loaded expression commercially reasonable? A good place to look is Barclays v Unicredit, which considered what a party must do if it is required to act “in a commercially reasonable manner”. Basically it is sensible and solemn and workable — you are entitled to consider your own book, your own models and your own axes, and can’t be second guessed by some appeal to the hypothetical.

As a corrective to any irrationally giddy feelings of happiness this may induce, see also Crowther v Arbuthnot Latham & Co Ltd — yes, you can legitimately consider your own risk situation, and you are best placed to judge it, but all the same this is not a licence to do what the hell you like.

If a discretion is designed for one purpose, you can’t use it, to the exclusion of that purpose, to achieve another.

Wise words.