Equity derivatives are financial instruments whose value is based on underlying equity securities, such as stocks or stock market indices. They allow market participants to transfer risks associated with the underlying securities. In recent years their popularity has grown spectacularly: by the end of 2007, $10 trillion of equity derivative over-the-counter (OTC) contracts were outstanding, an increase of 39% on 2006.
With the greatest volatility in equity markets seen in a generation, investors hedging themselves against or trading volatility, shareholders monetising holdings and corporates involved in M&A activity have been among those fuelling a boom in equity derivatives markets.
Equity Derivatives: Documenting and Understanding Equity Derivative Products examines the full spectrum of equity derivative transactions. This accessible title explains each type of transaction, together with the documentation involved. In particular, the book analyses and guides the reader through the full suite of OTC, exchange-traded and structured equity derivative documentation, and provides a detailed guide to the 2002 International Swaps and Derivatives Association Equity Derivatives Definitions.
The book further contains detailed analysis of the regulatory issues affecting equity derivative products in the United Kingdom, France, Germany, Italy, Spain and the United States, and covers tax issues arising in the United Kingdom and the United States.
Edited by Edmund Parker, head of derivatives at Mayer Brown, London and author of Credit Derivatives: Documenting and Understanding Credit Derivative Products, the publication includes chapters from leading experts at Allen & Overy, Clifford Chance, Credit Suisse, Freshfields Bruckhaus Deringer, Gide Loyrette Nouel, Legance, Mayer Brown, Morrison & Forester, Simpson Thacher & Bartlett LLP and Uría & Menéndez.
The book is an indispensable tool for lawyers, treasurers and derivatives specialists at corporates, financial institutions, hedge funds and pension schemes, and a valuable resource for students.