Definition

The trading terms contribution is determined by comparing the trading rate (price) to a reference rate (price). The reference price represents the fair market price or equilibrium price. The trading terms contribution results from purchases and sales in own-account trading.

Use

The trading terms contribution is used as a profitability value in Bank Profitability Analysis.

Structure

This contribution reflects the success (bargaining skill) of the dealer in relation to an individual transaction (purchase, sale). The trading terms contributions are added together for each single position/single transaction and reporting period.

A trading terms contribution determined in foreign currency is translated to the local currency (usually at the average rate) on the costing key date.

Integration

The reference rate has to be transferred.

Example

Class: BUND future

Tick: 0.01%

Tick value: 25 EUR

Purchase: 100 bonds at 101%

Reference rate: 101.1%

BHKOBE: Trading terms contribution