Finance

Tag: Derivatives contracts

  • Par Value

    Concept of Par Value in the context of derivatives contract, by the International Swaps and Derivatives Association (ISDA): The principal amount of a bond. Also known as the face value.ResourcesSee AlsoDerivatives Contract

  • Compounding

    Concept of Compounding in the context of derivatives contract, by the International Swaps and Derivatives Association (ISDA): The process by which the value of an investment increases by adding the accumulated interest back on the principal amount. In effect, the investment is earning interest […]

  • Equity Index Swap

    Concept of Equity Index Swap in the context of derivatives contract, by the International Swaps and Derivatives Association (ISDA): An obligation between two parties to exchange cash flows based on the percentage change in one or more stock indices for a specific period with previously agreed […]

  • Money

    In the MoneyConcept of In the Money in the context of derivatives contract, by the International Swaps and Derivatives Association (ISDA): A position which has intrinsic value, for example a portfolio acquired at a rate which is more advantageous than current market rates.ResourcesSee […]

  • Events

    Post Trade Events (pte)Concept of Post Trade Events (pte) in the context of derivatives contract, by the International Swaps and Derivatives Association (ISDA): An event that occurs after a trade is confirmed in DTCC Deriv/SERV.ResourcesSee AlsoDerivatives Contract

  • Dealer Poll

    Concept of Dealer Poll in the context of derivatives contract, by the International Swaps and Derivatives Association (ISDA): The process of finding a reference price for an asset by obtaining quotes from multiple dealers in that asset. Dealer polls also determine the value of a defaulted bond […]

  • European Option

    Concept of European Option in Futures TradingIn this context of financial law, the following is a definition of European Option: An option that may be exercised only on the expiration date. See American Option.

  • Credit Derivative

    Concept of Credit Derivative in Futures TradingIn this context of financial law, the following is a definition of Credit Derivative: A derivative contract designed to assume or shift credit risk, that is, the risk of a credit event such as a default or bankruptcy of a borrower. For example, a […]

  • Cash Settlement

    Concept of Cash Settlement in Futures TradingIn this context of financial law, the following is a definition of Cash Settlement: A method of settling futures, options and other derivatives whereby the seller (or short) pays the buyer (or long) the cash value of the underlying commodity or a […]

  • Variance Option

    Concept of Variance Option in the context of derivatives contract, by the International Swaps and Derivatives Association (ISDA): An option (i.e. the right to buy or sell a financial instrument at some agreed conditions) that uses the variance (being the volatility squared) of an underlying’s […]

  • Electronic Trade

    T-zeroConcept of T-zero in the context of derivatives contract, by the International Swaps and Derivatives Association (ISDA): An electronic trade affirmation tool used to communicate and enrich credit default swap trade information between dealers and clients. T-Zero™ electronically […]

  • Stepping Out

    Concept of Stepping Out in the context of derivatives contract, by the International Swaps and Derivatives Association (ISDA): The process where one of the original parties exits a transaction, and instead of terminating, a third party steps in upon identical terms and assumes the rights and […]

  • Nostro Reconciliation

    Concept of Nostro Reconciliation in the context of derivatives contract, by the International Swaps and Derivatives Association (ISDA): The process performed to ensure that the expected cash movements of a transaction (or multiple transactions) are reconciled with the actual cash movements […]

  • Automatic Exercise

    Concept of Automatic Exercise in Futures TradingIn this context of financial law, the following is a definition of Automatic Exercise: A provision in an option contract specifying that it will be exercised automatically on the expiration date if it is in-the-money by a specified amount, absent […]

  • Collateral Substitution

    Concept of Collateral Substitution in the context of derivatives contract, by the International Swaps and Derivatives Association (ISDA): The process where one form of collateral is substituted for another for example cash instead of bonds.ResourcesSee AlsoDerivatives Contract