Hello
Query on how the Equity Premium feature works.
Business Scenario
An Investment Firm buys 10 equity call options at EUR 11.46 per contract from another Investment Firm. The price multiplier (number of underlying equities represented in one contract) is 5.
The Total Premium Amount = 10*11.46 = EUR 114.6
How do we define the Price Per Option ?
Is it EUR 11.46 OR EUR 2.292 ?
11.46 = Price Per Option Contract = Total Premium / Number of Options
2.292 = Price Per Unit Underlying = Total Premium / (Number of Options x Option Entitlement)
https://www.fpml.org/spec/fpml-5-9-6-rec-1/html/confirmation/schemaDocumentation/schemas/fpml-eqd-5-9_xsd/complexTypes/EquityOption/equityPremium.html
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This topic was modified 4 years, 2 months ago by siddesai.