Intro to equity derivatives (cardbox)

52 Karteikarten

• 1
  An equity derivative is a derivative whose underlying ...

  a stock or stock index
• 2
  The seller of the stock option is referred to as (…)

  the option writer.
• 3
  The advantages of stock futures include the ability to ...

  " 1. speculate on (and short sell) 2. hedge 3. spread ...
• 4
  Convertibles are securities that are convertible into (…) ...

  the common stock of a company
• 5
  "Bonds carrying the right of conversion into a fixed amount ...

  convertible bonds
• 6
  "A security that may be converted into a fixed amount of ...

  convertible preferred stock
• 7
  A (...) is a type of security issued by a corporation that ...

  warrant
• 8
  Though warrants are often described as long-term options, ...

  new stock
• 9
  a (…) warrant, which gives the holder the right to buy ...

  call
• 10
  a (…) warrant, which gives the holder the right to sell ...

  put
• 11
  (…) give the holder the right, but not the obligation, to ...

  Covered warrants
• 12
  Covered warrants have proved highly popular in Europe ...

  low cost, flexibility, limited liability, and ...
• 13
  A stock index option gives the buyer the right, but not the ...

  stock index (or a stock index future)
• 14
  options on physicals — in theory, should result in the ...

  cash settled
• 15
  "futures options (options on stock index futures) — ...

  stock index futures contract
• 16
  Stock index future contracts provide investors with the ...

  "1. futures contract 2. an option"
• 17
  A (…) is an agreement to buy or sell a standard quantity ...

  stock index future
• 18
  "Uses of stock index futures include (…) "

  "hedging systematic risk speculating on the future ...
• 19
  Unlike traditional instruments, modern equity derivative ...

  market indexes
• 20
  Volumes traded in index products tend to increase ...

  market volatility
• 21
  "An agreement between two counterparties to swap the ...

  equity swap
• 22
  A security whose principal and/or coupon payments are ...

  equity-linked security
• 23
  A (…) is an agreement, between two parties, to exchange ...

  Contract for difference
• 24
  Long-term American-style options on individual stocks or a ...

  LEAPS® (Long-term Equity AnticiPation Securities)
• 25
  "A (…) is a form of cumulative preferred stock. It ...

  PERCS® (Preferred Equity Redemption Cumulative Stock)
• 26
  Option contracts which can be customized to suit the ...

  FLEX® Options (FLexible EXchange options)
• 27
  One of the most active markets for stock futures is on ...

  LIFFE (the UK futures and options exchange
• 28
  In LIFFe stock futures are known as (…)

  Universal Stock Futures (USFs)®.
• 29
  Contract size for USFs is typically(…)

  100 shares
• 30
  In a relative performance swap one leg is an equity index ...

  another equity index
• 31
  When the equity leg of an equity swap is based on an ...

  blended swap
• 32
  "Equity-linked notes can be thought of as the economic ...

  "1. a zero coupon bond 2. call option"
• 33
  A (…) is an instrument that allows the investor to trade ...

  volatility future
• 34
  A (…) references the relative perfomance of the ...

  correlation option
• 35
  A (…) is a swap in which an investor exchanges the ...

  dividend swap
• 36
  Equity index futures are typically settled (…)

  in cash
• 37
  (…) are hybrid instruments that combine features of both ...

  Convertible bonds
• 38
  A contingent convertible (CoCo) is a convertible bond that ...

  contingency requirement
• 39
  A discount convertible is a convertible issued at (…) to ...

  a discount
• 40
  Discount convertibles are characterized (…) payments and ...

  "lower coupon payments higher conversion premiums"
• 41
  A zero coupon convertible is a convertible which carries ...

  no coupon payment
• 42
  An exchangeable convertible is a convertible bond ...

  different
• 43
  A mandatory convertible is a convertible bond that (…) be ...

  must
• 44
  Convertibles have been issued with (…) features that make ...

  reset
• 45
  A busted convertible is a convertible bond whose conversion ...

  above
• 46
  A synthetic convertible is a bond with (…) on the ...

  warrants
• 47
  Delayed convertibles are not convertible for a certain ...

  after
• 48
  "(…) warrants accumulate value for each day they spend ...

  corridor warrants (or AIR corridor warrants as they are ...
• 49
  A (…) warrant (or digital warrant) pays the holder of the ...

  trigger
• 50
  A (…) warrant is a warrant in which a barrier level is ...

  turbo
• 51
  A (…) warrant is a warrant whose payoff is related to ...

  basket
• 52
  A (…) warrant is a warrant based on the spread between ...

  spread