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Template:M summ Equity Derivatives 12.7: Difference between revisions
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And even here, the concept doesn’t work: a {{eqderivprov|Cancellation Amount}} is crafted as the total termination amount for the ''whole'' {{eqderivprov|Transaction}}, not just a valuation of the {{eqderivprov|Equity Amount}} leg. Nor are such swaps otherwise contemplated in the {{eqdefs}}, seeing as there is a much easier way of achieving long exposure to one underlier and short exposure to another: just enter two vanilla {{eqderivprov|Transaction}}s, one long and one short. | And even here, the concept doesn’t work: a {{eqderivprov|Cancellation Amount}} is crafted as the total termination amount for the ''whole'' {{eqderivprov|Transaction}}, not just a valuation of the {{eqderivprov|Equity Amount}} leg. Nor are such swaps otherwise contemplated in the {{eqdefs}}, seeing as there is a much easier way of achieving long exposure to one underlier and short exposure to another: just enter two vanilla {{eqderivprov|Transaction}}s, one long and one short. | ||
===Ok, how about the User’s Guide to the 2002 Equity Derivatives Definitions?=== | ====Ok, how about the User’s Guide to the 2002 Equity Derivatives Definitions?==== | ||
Perhaps, you might thing, the User Guide sheds some light? Well, perhaps indeed. But alack: the little it has to say on the subject sheds light on one question only: that whoever wrote the User’s Guide<ref>Is it just me who finds the idea that ISDA contemplates just a solitary reader of its “User’s Guide”? And that that solitary reader is the JC? Mind you, it could be worse: the 2011 Equity Derivatives Definitions have ''no'' users!</ref> has no better clue to what is meant to be going on that anyone else. For it opines: | Perhaps, you might thing, the User Guide sheds some light? Well, perhaps indeed. But alack: the little it has to say on the subject sheds light on one question only: that whoever wrote the User’s Guide<ref>Is it just me who finds the idea that ISDA contemplates just a solitary reader of its “User’s Guide”? And that that solitary reader is the JC? Mind you, it could be worse: the 2011 Equity Derivatives Definitions have ''no'' users!</ref> has no better clue to what is meant to be going on that anyone else. For it opines: | ||
{{quote|“If there are two Determining Parties, each party will determine a Cancellation Amount ''and one half of the total of the Cancellation Amounts is payable''.”}} | {{quote|“If there are two Determining Parties, each party will determine a Cancellation Amount ''and one half of the '''total''' of the Cancellation Amounts is payable''.”}} | ||
This is, of course, not what Section 12.7(c) says at all. | This is, of course, not what Section 12.7(c) says at all. As we have noted, it says, “... an amount will be payable equal to one-half of the '''difference''' between the Cancellation Amount of the party with the higher Cancellation Amount (“X”) and the Cancellation Amount of the party with the lower Cancellation Amount (“Y”) and Y shall pay it to X.” | ||