Basic Data - Foreign Exchange
The trading area contains the key functions for entering and changing transaction data. To represent transactions efficiently in the system, you first have to enter the following basic data:
Initial data:
Company code
When you enter the company code, you determine which division within your corporate group is acting as the contracting party for the transaction.
Product type
The product type indicates which specialization of the product category is involved in the current transaction.
You define product types when you configure the system.
Examples
of product types:
|
Product type |
Product |
Description |
|
60A |
600 |
Foreign exchange |
|
76A |
760 |
Currency option |
Depending on the product type you enter, the system calls up a different entry screen. The entry screens are described below.
Transaction type
The transaction type defines which specialization of the transaction category, investment or borrowing, is involved in the current transaction. You define the permitted transaction types when you configure the system.
Business partner
You specify the opposite side of a transaction when you enter a business partner (see Business Partner).
Transaction
If you have specified external number assignment, you enter the key that uniquely identifies a financial transaction within a company code in the Transaction field in the External number assignment area.
Otherwise, the system assigns a number automatically.
Basic data:
Settlement
In this field, you enter the start of the period to be saved. In other words, the agreed interest rate comparison (settlement) takes place on this date minus 2 days (= payment date).
Exercise type
There are two types of exercise:
|
1 |
European option (at a certain point in time) |
|
2 |
American option (within a certain period of time) |
Exercise date
The exercise date is the expiration date of the option.
Amount
This is where you enter the amount of the transaction. The nominal amount is used as a basis for calculating the interest. In Customizing, you can define your own special characters or other alphabetic values as an abbreviation for thousands or millions. You can use the following input help:
|
m |
for millions |
|
t |
for thousands |
Calendar
Here, you can enter up to two calendar IDs. The calendar ID defines the various forms of calendar that are used to determine the interest rate fixing date. You define the calendar IDs as when you configure the system.
Term
Here you enter the Start of term and the End of term of the transaction. The system automatically defaults to the CPU date. You can enter the number of days with ‘+’ and the months with ‘++’.
+2 means that the start of the term is today + two days.
Premium
You enter the agreed premium here, either as a percentage or as a fixed amount (amount, currency, due date of the premium).
Settlement
When you conclude a transaction, the cash flow only consists of the premium. You can map both European and American options in the system. Examples of possible settlement types are:
|
1 |
Physical exercise |
|
2 |
Cash settlement |
|
* |
Not yet specified |
Strike limit
In this field you enter the agreed maximum or minimum interest rate.
Underlying
When you define product types, you can incorporate the related underlying transactions. For example, you can define a spot exchange transaction as the underlying transaction for currency options.
You can enter alternative payment methods for the option due to the separation into two transactions.
