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EQUITY LINKED DERIVATIVES

Statistics Directorate    
Definition:
Derivatives whose value derives from equity prices.

Context:
These include:

- Equity future—traded on an organized exchange, in which counterparties commit to buy or sell a specified amount of an individual equity or a basket of equities or an equity index at an agreed contract price on a specified date;

- Equity option—gives the purchaser the right but not the obligation to purchase (call) or sell (put) a specified amount of an individual equity or a basket of equities or an equity index at an agreed contract price on or before a specified date; and

- Equity swap—in which one party exchanges a rate of return linked to an equity investment for the rate of return on another equity investment.

Net cash settlements are usually made.

Source Publication:
IMF, 2003, External Debt Statistics: Guide for Compilers and Users – Appendix 1. Special financial instruments and transactions: classifications, IMF, Washington DC.

Hyperlink:
http://www.imf.org/external/pubs/ft/eds/Eng/Guide/index.htm

Statistical Theme: Financial statistics

Created on Friday, August 29, 2003