Exotic Options Clause Samples

The Exotic Options clause defines the terms and conditions under which non-standard, complex financial derivatives—known as exotic options—are governed within an agreement. This clause typically outlines the specific types of exotic options covered, such as barrier options, Asian options, or digital options, and details how their unique features, like payoff structures or triggering events, are handled. By clearly specifying the rules and obligations related to these specialized instruments, the clause ensures both parties understand the risks and mechanics involved, thereby reducing ambiguity and potential disputes.
Exotic Options. Unlike "plain vanilla" put and call options, exotic options are subject to additional conditions and agreements. Exotic options come in the form of tailor-made over-the-counter options or as warrants (see section on “Warrants” below). Given the special composition of exotic options, their price movements can vary markedly from those of their "plain vanilla" cousins. The Customer must also be aware that larger transactions can trigger price movements even shortly before expiration and that these can render an option worthless. There is no limit to the structures exotic options may take and the Customer should seek comprehensive advice about the particular risks involved before entering into any transaction involving an exotic option.
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Related to Exotic Options

  • Options (1) Upon receipt of Instructions relating to the purchase of an option or sale of a covered call option, the Custodian shall: (a) receive and retain confirmations or other documents, if any, evidencing the purchase or writing of the option by a Fund; (b) if the transaction involves the sale of a covered call option, deposit and maintain in a segregated account the Securities (either physically or by book-entry in a Securities System) subject to the covered call option written on behalf of such Fund; and (c) pay, release and/or transfer such Securities, cash or other Assets in accordance with any notices or other communications evidencing the expiration, termination or exercise of such options which are furnished to the Custodian by the Options Clearing Corporation (the "OCC"), the securities or options exchanges on which such options were traded, or such other organization as may be responsible for handling such option transactions. (2) Upon receipt of Instructions relating to the sale of a naked option (including stock index and commodity options), the Custodian, the appropriate Fund and the broker-dealer shall enter into an agreement to comply with the rules of the OCC or of any registered national securities exchange or similar organizations(s). Pursuant to that agreement and such Fund's Instructions, the Custodian shall: (a) receive and retain confirmations or other documents, if any, evidencing the writing of the option; (b) deposit and maintain in a segregated account, Securities (either physically or by book-entry in a Securities System), cash and/or other Assets; and (c) pay, release and/or transfer such Securities, cash or other Assets in accordance with any such agreement and with any notices or other communications evidencing the expiration, termination or exercise of such option which are furnished to the Custodian by the OCC, the securities or options exchanges on which such options were traded, or such other organization as may be responsible for handling such option transactions. The appropriate Fund and the broker-dealer shall be responsible for determining the quality and quantity of assets held in any segregated account established in compliance with applicable margin maintenance requirements and the performance of other terms of any option contract.

  • Employee Options A regular employee who is subject to displacement shall have the right to select one of the following options. Upon written presentation of the options, the employee shall have 3 full working days to select an option. This time limit may be extended by the mutual agreement of the Parties: (a) accept training, if applicable; or (b) accept placement in a vacant position, either within or outside the bargaining unit, in accordance with the provisions of this Article; or (c) exercise the bumping rights referred to in this Article; or (d) accept layoff, retaining the right to recall and to severance pay in accordance with this Agreement; or (e) accept severance in accordance with Article 9.03 of this Agreement.