Entering content frameProcedure documentation OTC Options

Procedure

  1. Choose Create.
  2. Enter the company code, product type, transaction type and business partner.
  3. If the transaction is to be assigned to a portfolio, please specify this. Alternatively, you can enter the portfolio on the tab page via Administration ® Portfolio assignment.
  4. Decide whether the transaction is to be created as a contract or order in the Activity area.
  5. If you are working with external number assignment, specify a key for the transaction in the corresponding field so that it can be uniquely identified within a company code. Otherwise, the number is automatically assigned by the system and confirmed when you save the transaction.
  6. Choose This graphic is explained in the accompanying textEnter to access the basic data screen for the option. On the Structure link Structure tab page, enter the actual transaction data for the purchase/sale.
  7. A dialog box can appear here if several flow types have been assigned to a flow category in Customizing.

ExamplePossible flow types: Option premium (OTC) or balance sheet-relevant option premium.

8. The following fields must/can be filled with transaction data:

Area: Structure - Exercise date, exercise type and settlement (refer to the unit entitled Basic data - Derivatives).

Enter the underlying transaction via Underlying. The fields on the entry screen on the tab page depend on the type of option transaction (product type) - that means that a different entry screen appears depending on the product type.

Enter the values required in the Premium area.

9. Enter the barriers required for knock-in or knock-out options via Edit ® Barriers or via the Barriers button.

10. In order to assign the transaction entered as a counter transaction to an existing transaction, you can use the extra fields in the administrative data. Both transactions are handled separately.

11. In the case of a disclaimer, bost transactions must have notice given on them in the system.

12. You can also branch to the entry screens of general transaction management ( Structure link Administration, Structure link Cash flow, Structure link Other flows, Structure link Payment details, Structure link Memos and Structure link Status).

13. In the upper applications toolbar, you have access to further functions via Structure link Extras and Structure link Environment.

14. To save the basic data, choose OTC Option ® Save.

15. Refer to the unit entitled Structure link OTC option.

Prerequisites

Corresponding underlyings are included in the definition of product types. A spot exchange transaction is, for example, defined as an underlying in currency options. In general, underlying transactions are automatically generated in physical exercise. You can enter alternative payment methods for the option due to this separation into two transactions.

This graphic is explained in the accompanying text

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