Basic Data - Derivatives

The trading area contains the key functions for entering and changing transaction data. To map transactions in the system efficiently, you first have to enter the following basic data:

Initial Screen:

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 as part of system configuration.

 Examples of product types:

Product  type	Product  category	Description
61B	610	Floor
62A	620	Interest rate swap
76B	760	Swaption

Depending on which product type you enter, the system calls up a different entry screen. The entry screens are described in more detail below.

Transaction type

The transaction type defines what degree of specialization of the transaction category purchase, sale or swap is involved in the current transaction. You define the permitted transaction types during system configuration.

Business partner

You specify the other side of a transaction when you enter the name of the business partner concerned (see Business Partner).

Transaction

If you have specified external number assignment, 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:

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)

Amount

This is where you enter the amount of the transaction. It 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

Business calendar (only for a FRA)

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.

Term

Here, you enter the Start of term and the End of term of the transaction. You can use the ‘+’ symbol to enter the days and ‘++’ to enter the number of months.

+2 means that the start of the term is today + two days.

Settlement

When the transaction is concluded, the transaction consists only of the premium. Both European and American options can be represented in the system. Examples of possible settlement types are:

1	Physical exercise
2	Cash settlement
*	Not yet specified

Strike limit (only for caps)

Here, you enter the agreed maximum or minimum interest rate.

Underlying

When you define product types, you can include the related underlying transactions. For example, you can define a spot exchange transaction as the underlying transaction for currency options.