Template:Nutshell Equity Derivatives 2

Article 2 General Terms Relating to Option Transactions
2.1. Certain Definitions and Provisions Relating to Option Transactions. The following terms apply to Option Transactions:

2.1(a) “Commencement Date” means, for an American Option Transaction, the date so specified in the Confirmation (or the next following Scheduled Trading Day, if it is not a Scheduled Trading Day) or if no such date is specified, the Trade Date.

2.1(b) “Number of Options” must be specified in the Confirmation.

2.1(c) “Option Entitlement” means the number of Shares, or Baskets, per Option specified in the Confirmation or, if none is specified, one Share or Basket per Option.

2.1(d) “Option” means each unit into which an Option Transaction is divided for purposes of exercise, valuation or settlement.

2.1(e) “Strike Price” means:

(i) for an Index Option Transaction, the level of the Index specified in the Confirmation;

(ii) for a Share Option Transaction, the price per Share specified in the Confirmation;

(iii) for an Index Basket Option Transaction, the amount per Basket specified in the Confirmation; and

(iv) for a Share Basket Option Transaction, the amount per Basket specified in the Confirmation.

2.2. Option Style.

2.2(a) “American Option” means an Option Transaction which is not a Bermuda Option and which may be exercised on any Scheduled Trading Day during a multi-day Exercise Period.

2.2(b) “Bermuda Option” means an Option Transaction which may be exercised only on the Potential Exercise Dates during the Exercise Period and on the Expiration Date.

2.2(c) “European Option” means an Option Transaction which may be exercised only on the Expiration Date.

2.3. Option Type.

2.3(a) “Call” means an Option Transaction entitling Buyer:

(i) Where “Cash Settlement” applies: To receive from Seller the Option Cash Settlement Amount (where the Settlement Price exceeds the Strike Price); and

(ii) Where “Physical Settlement” applies: To buy Shares (or Baskets) from Seller at the Settlement Price per Share or Basket.

2.3(b) “Put” means an Option Transaction entitling Buyer:

(i) Where “Cash Settlement” applies: To receive from Seller the Option Cash Settlement Amount (where the Strike Price exceeds the Settlement Price); and

(ii) Where “Physical Settlement” applies: To sell Shares (or Baskets) to Seller at the Settlement Price per Share or Basket.

2.4. Terms Relating to Premium.

2.4(a) Payment of Premium: Buyer must pay Seller the Option Transaction Premium on the Premium Payment Date.

2.4(b) “Premium” for an Option Transaction will be specified in the Confirmation. Where the Confirmation specifies a Premium per Option, the Premium will be the product of the per-Option Premium and the Number of Options.

2.4(c) “Premium Payment Date” will be the date specified as such in the Option Transaction Confirmation or, if it is not a Currency Business Day for the currency of the Premium, the next following Currency Business Day. If it is not specified, the Premium Payment Date will fall one Settlement Cycle following the Trade Date, or if that is not a Currency Business Day, the next following Currency Business Day.