Base Instrument Types

Instrument base types compose the foundation for defining financial instruments in Deal Management. There are nine fundamental instrument base types from which you can build simple and complex instruments. Use these instrument base types when you define an instrument or create a template:

  • Interest Rate Physicals

    The purchase or sale of interest rate instruments, such as bonds and commercial paper. You can hold these instruments as investments or you can designate them as debts (such as internal or external bank loans).

    Note:

    Commercial paper is covered in greater detail in the "Managing Facilities in Deal Management" topic.

    See Understanding Commercial Paper and Line of Credit Facilities.

  • Interest Rate Swaps

    The exchange of fixed and floating rate instruments. Use this base type for interest rate swaps and cross-currency swaps.

  • Foreign Exchange (FX) Deal Physicals

    The purchase or sale of a foreign exchange instrument on a spot or cash basis. This instrument base type applies to transactions bought or sold on a forward basis for delivery on a specified future date.

  • Option

    Use this base type to enter detail attributes for options on another base type. For example, the design of an option on a spot foreign exchange has two parts: the underlying foreign exchange instrument and the option on that instrument.

    This base type handles European, American, and Bermudan exercise features, as well as a range of option types, such as Standard, Asian, Lookbacks, Barriers, and others.

  • Option - Binary Payoff

    For binary options where the payoff is a monetary amount.

  • Future

    The purchase or sale of a specific amount of a commodity or financial instrument at a particular price on a stipulated future date.

  • Commodity

    Bulk goods such as grains, metals, and food that are traded on a commodity exchange or on-the-spot market.

  • Generic

    A format that is adaptable to your special requirements.

  • Equities

    The purchase or sale of stocks for the purpose of earning investment income as well as to exert influence or control the board of directors and management of the invested company.

    See Understanding Equities.