Template:M summ Equity Derivatives 12.9(b): Difference between revisions

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The important ones are the {{eqderivprov|Triple Cocktail}}: {{eqderivprov|Change in Law}}, {{eqderivprov|Hedging Disruption}} and {{eqderivprov|Increased Cost of Hedging}}. They have marginally different play-out rights:
{{additional disruption events capsule}}
*'''{{eqderivprov|Change in Law}}''': Either party can terminate on 2 {{eqderivprov|Scheduled Trading Day}}’s notice, at the {{eqderivprov|Cancellation Amount}}.
*'''{{eqderivprov|Hedging Disruption}}''': {{eqderivprov|Hedging Party}} can terminate on 2 {{eqderivprov|Scheduled Trading Day}}’s notice, at the {{eqderivprov|Cancellation Amount}}.
*'''{{eqderivprov|Increased Cost of Hedging}}''': {{eqderivprov|Hedging Party}} can present the other guy with a proposed {{eqderivprov|Price Adjustment}}. Other guy, within 2 {{eqderivprov|Scheduled Trading Day}}s, either accepts the {{eqderivprov|Price Adjustment}} in an amended trade, pays the [[PV]] of the {{eqderivprov|Price Adjustment}} in full, or the Hedging Party can terminate the trade on the second {{eqderivprov|Scheduled Trading Day}}, at the {{eqderivprov|Cancellation Amount}}.
 
Okay, okay, I hear you — [[LOSB - Equity Derivatives Provision|LOSB]] and {{eqderivprov|ICOSB}} are important too. For those:
*'''{{eqderivprov|Loss of Stock Borrow}}''': {{eqderivprov|Hedging Party}} gives 2 {{eqderivprov|Scheduled Trading Day}}’s notice of the {{eqderivprov|LOSB}}. Other guy can either lend the shares itself at the {{eqderivprov|Maximum Stock Loan Rate}} or lower, or if it doesn’t the {{eqderivprov|Hedging Party}} can terminate the trade at the {{eqderivprov|Cancellation Amount}}.
*'''{{eqderivprov|Increased Cost of Stock Borrow}}''': {{eqderivprov|Hedging Party}} can present the other guy with a proposed {{eqderivprov|Price Adjustment}}. Other guy, within 2 {{eqderivprov|Scheduled Trading Day}}s, either accepts the {{eqderivprov|Price Adjustment}} in an amended trade, pays the [[PV]] of the {{eqderivprov|Price Adjustment}} in full, or lend the {{eqderivprov|Hedging Party}} the necessary {{eqderivprov|Shares}}, Failing this, the {{eqderivprov|Hedging Party}} can terminate the trade on the second {{eqderivprov|Scheduled Trading Day}}, at the {{eqderivprov|Cancellation Amount}}.
 
{{eqderivprov|Insolvency Filing}} and {{eqderivprov|Failure to Deliver}} ... well — are they even ''applied'' in your confirm?

Latest revision as of 17:26, 27 March 2020

Additional Disruption Events dans une Nutshell™

The important Additional Disruption Events are the Triple Cocktail: Change in Law, Hedging Disruption and Increased Cost of Hedging. They have marginally different play-out rights:

Okay, okay, I hear you — LOSB and ICOSB are important too. For those:

Insolvency Filing and Failure to Deliver ... well — are they even applied in your confirm?

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