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Financial Terms | |
ISDA |
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Definition of ISDAISDAInternational Swap Dealers Association. Formed in 1985 to promote uniform practices in the writing,
Related Terms:Accumulated Other Comprehensive IncomeCumulative gains or losses reported in shareholders' All-or-none underwritingAn arrangement whereby a security issue is canceled if the underwriter is unable Amortizing interest rate swapSwap in which the principal or national amount rises (falls) as interest rates Asset for asset swapCreditors exchange the debt of one defaulting borrower for the debt of another Asset swapAn interest rate Swap used to alter the cash flow characteristics of an institution's assets so as to Bank for International Settlements (BIS)An International bank headquartered in Basel, Switzerland, which Bill and Hold PracticesProducts that have been sold with an explicit agreement that delivery ![]() Call swaptionA Swaption in which the buyer has the right to enter into a Swap as a fixed-rate payer. The Canadian Life and Health Insurance Association (CLHIA)An Association of most of the life and health insurance companies in Canada that conducts research and compiles information about the life and health insurance industry in Canada. Cash settlement contractsFutures contracts, such as stock index futures, that settle for cash, not involving Circus swapA fixed rate currency Swap against floating U.S. dollar LIBOR payments. Common stock/other equityValue of outstanding common shares at par, plus accumulated retained Covered call writing strategyA strategy that involves writing a call option on securities that the investor Creative Accounting PracticesAny and all steps used to play the financial numbers game, including Currency swapAn agreement to Swap a series of specified payment obligations denominated in one currency Day tradingRefers to establishing and liquidating the same position or positions within one day's trading. ![]() Debt swapA set of transactions (also called a debt-equity Swap) in which a firm buys a country's dollar bank Differential swapSwap between two LIBO rates of interest, e.g. yen LIBOR for dollar LIBOR. Payments are Domestic International Sales Corporation (DISC)A U.S. corporation that receives a tax incentive for Equity swapA Swap in which the cash flows that are exchanged are based on the total return on some stock Extension swapExtending maturity through a Swap, e.g. selling a 2-year note and buying one with a slightly Firm commitment underwritingAn undewriting in which an investment banking firm commits to buy the Foreign Corrupt Practices Act (FCPA)a law passed by U.S. Congress in 1977 that makes it illegal for a U.S. company to engage in various “questionable” foreign payments and Foreign exchange swapAn agreement to exchange stipulated amounts of one currency for another currency Good delivery and settlement proceduresRefers to PSA uniform practices such as cutoff times on delivery Government National Mortgage Association (Ginnie Mae)A wholly owned U.S. government corporation Immediate settlementDelivery and settlement of securities within five business days. ![]() Insider tradingtrading by officers, directors, major stockholders, or others who hold private inside Interest rate swapA binding agreement between counterparties to exchange periodic interest payments on Intermarket spread swapsAn exchange of one bond for another based on the manager's projection of a International Bank for Reconstruction and Development - IBRD or World BankInternational Bank for Reconstruction and Development makes loans at nearly conventional terms to countries for projects of high International Banking Facility (IBF)International Banking Facility. A branch that an American bank International bondsA collective term that refers to global bonds, Eurobonds, and foreign bonds. International Depository Receipt (IDR)A receipt issued by a bank as evidence of ownership of one or more International diversificationThe attempt to reduce risk by investing in the more than one nation. By International finance subsidiaryA subsidiary incorporated in the U.S., usually in Delaware, whose sole International Fisher effectStates that the interest rate differential between two countries should be an international Fisher effectTheory that real interest rates in all countries should be equal, with differences in nominal rates reflecting differences in expected inflation. International fundA mutual fund that can invest only outside the United States. international fundA mutual fund that can invest in securities issued anywhere outside of Canada. International marketRelated: See external market. International Monetary FundAn organization founded in 1944 to oversee exchange arrangements of International Monetary Fund (IMF)Organization originally established to manage the postwar fixed exchange rate system. International Monetary Market (IMM)A division of the CME established in 1972 for trading financial International ReservesSee foreign exchange reserves. Last trading dayThe final day under an exchange's rules during which trading may take place in a particular Liability swapAn interest rate Swap used to alter the cash flow characteristics of an institution's liabilities so London International Financial Futures Exchange (LIFFE)A London exchange where Eurodollar futures London International Financial Futures Exchange (LIFFE)London exchange where Eurodollar futures as well as futures-style options are traded. National Futures Association (NFA)The futures industry self regulatory organization established in 1982. Official Settlements AccountAn account within the balance of payments accounts showing the change in a country's official foreign exchange reserves. It is used to measure a balance of payments deficit or surplus. Other assetsA cluster of accounts that are listed after fixed assets on the balance sheet, Other capitalIn the balance of payments, other capital is a residual category that groups all the capital Other current assetsValue of non-cash assets, including prepaid expenses and accounts receivable, due Other long term liabilitiesValue of leases, future employee benefits, deferred taxes and other obligations Other sourcesAmount of funds generated during the period from operations by sources other than Other-than-Temporary Decline in Market ValueThe standard used to describe a decline in market value that is not expected to recover. The use of the other-than-temporary description as Program tradingTrades based on signals from computer programs, usually entered directly from the trader's Pure yield pickup swapMoving to higher yield bonds. Put swaptionA financial tool in which the buyer has the right, or option, to enter into a Swap as a floatingrate Quanto swapSee: differential Swap. Rate anticipation swapsAn exchange of bonds in a portfolio for new bonds that will achieve the target Regular way settlementIn the money and bond markets, the regular basis on which some security trades are Savings and Loan associationNational- or state-chartered institution that accepts savings deposits and SettlementWhen payment is made for a trade. Settlement dateThe date on which payment is made to settle a trade. For stocks traded on US exchanges, Settlement dateThe date when money first changes hands; i.e., when a buyer Settlement priceA figure determined by the closing range which is used to calculate gains and losses in Settlement rateThe rate suggested in Financial Accounting Standard Board (FASB) 87 for discounting the SIMEX (Singapore International Monetary Exchange)A leading futures and options exchange in Singapore. Skip-day settlementThe trade is settled one business day beyond what is normal. Structured settlementAn agreement in settlement of a lawsuit involving specific payments made over a Structured SettlementHistorically, damages paid out during settlement of personal physical injury cases were distributed in the form of a lump-sum cash payment to the plaintiff. This windfall was intended to provide for a lifetime of medical and income needs. The claimant or his/her family was then forced into the position of becoming the manager of a large sum of money. Substitution swapA Swap in which a money manager exchanges one bond for another bond that is similar in SwapAn arrangement whereby two companies lend to each other on different terms, e.g. in different SwapAn exchange of cash flows between two counterparties. The SwapA contract between two parties to exchange cash flows in the future swapArrangement by two counterparties to exchange one stream of cash flows for another. Swap assignmentRelated: Swap sale. Swap buy-backThe sale of an interest rate Swap by one counterparty to the other, effectively ending the Swap. Swap optioSee: Swaption. Swap rateThe difference between spot and forward rates expressed in points, e.g., $0.0001 per pound sterling. Swap reversalAn interest rate Swap designed to end a counterparty's role in another interest rate Swap, Swap saleAlso called a Swap assignment, a transaction that ends one counterparty's role in an interest rate SwaptionOptions on interest rate Swaps. The buyer of a Swaption has the right to enter into an interest rate SwaptionA Swap option; an option on an interest-rate Swap. The option gives Tax swapSwapping two similar bonds to receive a tax benefit. TradingBuying and selling securities. Trading costsCosts of buying and selling marketable securities and borrowing. trading costs include Trading halttrading of a stock, bond, option or futures contract can be halted by an exchange while news is Trading paperCDs purchased by accounts that are likely to resell them. The term is commonly used in the Euromarket. Trading postsThe posts on the floor of a stock exchange where the specialists stand and securities are traded. Trading rangeThe difference between the high and low prices traded during a period of time; Trading SecurityA debt or equity security bought and held for sale in the near term to generate income on short-term price changes. UnderwritingActing as the underwriter in a purchase and sale. UnderwritingEvaluating and classifying potential risk of a client. Underwriting feeThe portion of the gross underwriting spread that compensates the securities firms that Underwriting incomeFor an insurance company, the difference between the premiums earned and the costs Underwriting syndicateA group of investment banks that work together to sell new security offerings to Uniform Interstate Family Support ActA federal Act specifying which jurisdiction Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |