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2 years ago

What is the crucial difference between cash settled and equity settled transactions?

1 answer:

3 0

A transaction is cash-settled where the entity receives goods/services, at a value which is based on the price of the entity's equity instruments.

Cash settlement is a method of settlement used in certain futures and options contracts whereby the seller of a financial instrument takes a related cash position at maturity or exercise rather than delivering the actual (physical) underlying asset. transfer.

CSF is a tool that can be used effectively by participants who adopt strategies that do not require a real currency exchange. In fact, using such tools can significantly reduce settlement risk and costs associated with his PvP system, which is designed to mitigate settlement risk.

A cash-settled total return swap (TRS) is a transaction in which one party (usually a bank) provides another party (the long party) with market appreciation and cash flows (e.g., an agreed number of shares in a public company). related dividend payments).

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