Template:Mdes vs ades: Difference between revisions

*'''{{eqderivprov|Market Disruption Event}}s''' handle difficulties in valuing ongoing {{eqderivprov|Transaction}}s in a disrupted market — where the parties are happy to carry on with the position, but their practical means of [[Mark-to-market|marking-to-market]] (and therefore [[Margin|margining]]) their exposures under the {{eqderivprov|Transaction}}s is hampered because of market dislocation;  

*{{eqderivprov|Additional Disruption Event}}s handle your rights to ''terminate'' {{eqderivprov|Transaction}}s, usually because your ability to properly risk-manage your positions — i.e., ''[[hedge]]'' — is undermined by the market dislocation.

So the two are independent. You don't have to wait for a period of {{eqderivprov|Exchange Disruption}} before invoking a {{eqderivprov|Hedging Disruption}}; you can treat something as an {{eqderivprov|Exchange Disruption}} even if it is not a {{eqderivprov|Hedging Disruption}}.

In point of fact an Exchange Disruption may well count as a Hedging Disruption, so this might be why the {{eqderivprov|Consequences of Disrupted Days}} wording seems to finally run out of enthusiasm for its own existence, as if {{icds}} threw in the towel. Probably because, after eight straight {{eqderivprov|Disrupted Day}}s, the likelihood one or other party hasn’t canned the {{eqderivprov|Transaction}} on the grounds of {{eqderivprov|Hedging Disruption}} is pretty low. <br>