(1) What is the contract size for S&P 500 Futures? (2) What is the notional value of your position? (3) What is the initial margin in dollars? (4)Suppose you earn a continuously-compounded interest rate of 6% on your margin balance, your position is marked to market weekly, an...
What is a derivative? Derivatives are financial contracts between two parties that specify the conditions of purchase of an asset (including dates, amounts, description of asset, party obligations). The value of these contracts derives from the value of another asset, hence the name. The asset ...
The "normal purchase and sales" exemption in FAS 1 33 allows companies to ignore the fact that their purchase and sales agreements satisfy the definition of a derivative, as long as certain conditions are ...
Notional value is a key metric in the derivatives markets, representing the total exposure/value of a derivative position, such as an option or future. For investors and traders, the notional value illuminates the scale/size of a position, detailing the amount of the underlying asset that the ...
An equity swap is a deal between two investors in which each gives the other income from his or her investments. The reasons for...
If your PayPal balance shows a negative amount, this is the net amount you owe to us at the given time. Reserve account Money marked in your account overview as "pending", "uncleared", "held" or otherwise restricted or limited at any given time is held in the part of your account ...
That is, the FASB now allows companies to ignore the fact that their purchase and sales agreements satisfy the definition of a derivative as long as (a) it is prob- able that the company will, in fact, take part in a physical transfer of the underlying property; (b) the amounts ...
You may be wondering why a swap bank is necessary to an IRS, as opposed to the two parties just setting up the agreement between themselves. The reasons tend to be practical. It is unlikely that Co A would know that Co B also requires an IRS on the same notional amount and over the...
An asset swap is aderivativecontract where two parties exchange fixed and floating assets. Floating assets continually change in quantity or value. Mostswapsinvolve cash flows based on anotional principal amountand an actual asset exchange. Swaps do not trade on exchanges, and retail investors do n...
A targeted accrual redemption note (TARN) is an index-linked derivative containing a target cap. The cap refers to the maximum amount of accumulated coupon payments received. Once the cap has been reached, the note automatically terminates. ...