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Template:Nutshell Equity Derivatives 11.2(c): Difference between revisions
Template:Nutshell Equity Derivatives 11.2(c) (view source)
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:{{eqderivprov|11.2(c)}} If “'''{{p|eq|Calculation Agent Adjustment (Share Transactions)|Calculation Agent Adjustment}}'''” is the {{eqderivprov|Method of Adjustment}} for a {{eqderivprov|Share Transaction}} or {{eqderivprov|Share Basket Transaction}} (or if none is specified) then following the {{eqderivprov|Issuer}}’s declaration of an {{eqderivprov|Potential Adjustment Event}}, the {{eqderivprov|Calculation Agent}} will determine whether the {{eqderivprov|Potential Adjustment Event}} will concentrate or dilute the value of the {{eqderivprov|Shares}}. If it will the Calculation Agent may | :{{eqderivprov|11.2(c)}} If “'''{{p|eq|Calculation Agent Adjustment (Share Transactions)|Calculation Agent Adjustment}}'''” is the {{eqderivprov|Method of Adjustment}} for a {{eqderivprov|Share Transaction}} or {{eqderivprov|Share Basket Transaction}} (or if none is specified) then following the {{eqderivprov|Issuer}}’s declaration of an {{eqderivprov|Potential Adjustment Event}}, the {{eqderivprov|Calculation Agent}} will determine whether the {{eqderivprov|Potential Adjustment Event}} will concentrate or dilute the value of the {{eqderivprov|Shares}}. If it will the Calculation Agent may | ||
::(i) adjust any of the {{eqderivprov|Initial Price}}, {{eqderivprov|Strike Price}}, {{eqderivprov|Equity Notional Amount}}, {{eqderivprov|Number of Shares}}, {{eqderivprov|Number of Options}}, {{eqderivprov|Option Entitlement}}, {{eqderivprov|Knock-in Price}}, {{eqderivprov|Knock-out Price}}, {{eqderivprov|Forward Price}}, {{eqderivprov|Forward Floor Price}}, or {{eqderivprov|Forward Cap Price}} and any other relevant variable under that {{eqderivprov|Transaction}} as the {{eqderivprov|Calculation Agent}} thinks necessary to account for that | ::(i) adjust any of the {{eqderivprov|Initial Price}}, {{eqderivprov|Strike Price}}, {{eqderivprov|Equity Notional Amount}}, {{eqderivprov|Number of Shares}}, {{eqderivprov|Number of Options}}, {{eqderivprov|Option Entitlement}}, {{eqderivprov|Knock-in Price}}, {{eqderivprov|Knock-out Price}}, {{eqderivprov|Forward Price}}, {{eqderivprov|Forward Floor Price}}, or {{eqderivprov|Forward Cap Price}} and any other relevant variable under that {{eqderivprov|Transaction}} as the {{eqderivprov|Calculation Agent}} thinks necessary to account for that dilution or concentration (but it will not adjust just for changes in volatility, expected dividends, stock loan rate or liquidity) and | ||
::(ii) determine the effective dates of any adjustments. | ::(ii) determine the effective dates of any adjustments. | ||
:In doing so, the {{eqderivprov|Calculation Agent}} may refer to corresponding adjustments made by an options exchange to corresponding options. <br> | :In doing so, the {{eqderivprov|Calculation Agent}} may refer to corresponding adjustments made by an options exchange to corresponding options. <br> | ||