Commodity Cap Transaction
| 19:42 Oct 19, 2010 |
| English language (monolingual) [PRO] Bus/Financial - Accounting | ||||
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| 4 | type of derivatives/swap transation |
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| Definition of Cap Transaction from ISDA |
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Answers
25 mins confidence: 
| commodity cap transaction type of derivatives/swap transation Explanation: "One party pays a single or periodic fixed amounts and the other pays the excess (if any) of e.g. a specified floating rate, commodity price over an agreed rate or commodity price." http://www.derivativeslawyer.com/type.html Cap refers to highest price set in the agreement, and floor refers to the lowest price set in the agreement. -------------------------------------------------- Note added at 31 mins (2010-10-19 20:14:03 GMT) -------------------------------------------------- This also places the term as part of a swap transaction: From the: GUIDE TO THE BACHE COMMODITY INDEX which may have other somewhat useful information for you. Transaction: Any Transaction that is a Commodity swap Transaction, Commodity basis swap Transaction, Commodity cap Transaction, Commodity floor Transaction, Commodity collar Transaction, Commodity option Transaction, Commodity index Transaction, Commodity forward Transaction, or Commodity spot Transaction http://www.bache.com/media/managed/Bache_BCI_Guide_2009-Apr-... -------------------------------------------------- Note added at 37 mins (2010-10-19 20:20:30 GMT) -------------------------------------------------- From the ISDA: International Swaps and Derivatives Association, Inc. "Cap Transaction. A transaction in which one party pays a single or periodic fixed amount and the other party pays periodic amounts ... with (a) commodity price (in the case of a commodity cap) in each case that is reset periodically over a specified per annum price (in the case of a commodity cap)." There are also interest rate cap transactions which are not relvant to your immediate text. |
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Reference comments
36 mins |
| Reference: Definition of Cap Transaction from ISDA Reference information: This is the definition from the International Swaps and Derivatives Association: Cap Transaction. A transaction in which one party pays a single or periodic fixed amount and the other party pays periodic amounts of the same currency based on the excess, if any, of a specified floating rate (in the case of an interest rate cap) or commodity price (in the case of a commodity cap) in each case that is reset periodically over a specified per annum rate (in the case of an interest rate cap) or commodity price (in the case of a commodity cap). -------------------------------------------------- Note added at 37 mins (2010-10-19 20:19:45 GMT) -------------------------------------------------- HTH :) Reference: http://www.sitelevel.com/quclk.cgi?rd=http%3a%2f%2fwww.isda.... |
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