82,903
edits
Template:Equity swaps on futures: Difference between revisions
no edit summary
Amwelladmin (talk | contribs) No edit summary |
Amwelladmin (talk | contribs) No edit summary |
||
| (2 intermediate revisions by the same user not shown) | |||
| Line 1: | Line 1: | ||
==={{eqderivprov|Share Transactions}} on [[futures]]=== | ==={{eqderivprov|Share Transactions}} on [[futures]]=== | ||
A trick for young players. For all this talk of {{eqderivprov|Futures Price Valuation}}, section {{eqderivprov|8 | A trick for young players. For all this talk of {{eqderivprov|Futures Price Valuation}}, section {{eqderivprov|6.8}} is all about {{eqderivprov|Index Transaction}}s and {{eqderivprov|Index Basket Transaction}}s, where (since you can’t by an {{eqderivprov|Index}} directly, it not being a corporeal thing, but merely an interesting<ref>Look, just go with me on this one, would you?</ref> disembodied intellectual concept), so the cleanest way of getting actual exposure to an index is to buy [[futures]] on the {{eqderivprov|Index}}. It’s that, or buying the actual shares underlying the index — which is quite the operational pain in the posterior, if there are a hundred shares: all that balancing whenever the index constituents change. Gah. You get the idea. | ||
Now, what say you want to write an {{eqderivprov|Equity Swap Transaction}} on a ''share'' [[future]] directly? | Now, what say you want to write an {{eqderivprov|Equity Swap Transaction}} on a ''share'' [[future]] directly? | ||
| Line 10: | Line 10: | ||
As is so often the case, the answer can be laid at the door of our American friends. The [[CFTC]] doesn’t allow one to write swaps on certain {{eqderivprov|Shares}}, so if you want synthetic exposure to them, the, ahhh, [[future]] is your only hope.<ref>This sounds like something [[Criswell]] would say, doesn’t it?</ref> | As is so often the case, the answer can be laid at the door of our American friends. The [[CFTC]] doesn’t allow one to write swaps on certain {{eqderivprov|Shares}}, so if you want synthetic exposure to them, the, ahhh, [[future]] is your only hope.<ref>This sounds like something [[Criswell]] would say, doesn’t it?</ref> | ||
You may want to borrow some of the concepts from this Futures Price Valuation, but you’ll need to do some ninja [[mutatis mutandis]] moves. | You may want to borrow some of the concepts from this {{eqderivprov|Futures Price Valuation}} — what’s not to like about ISDA standard drafting, after all — but you’ll need to do some ninja ''[[mutatis mutandis]]'' moves, taking our references to “{{eqderivprov|Index}}” throughougt and replacing them with references to “the assets underling the {{eqderivprov|Exchange-traded Contract}}”. | ||