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Derivatives




Issuer Derivative


A special type of equity derivatives that is linked to a corporate issuer’s common stock. It is usually issued by the reporting issuer to which an insider reporting requirement on a holding or transaction relates. Examples include: buy-and-write securities, warrants, convertible securities, PERCSs, and unbundled stock units. Convertible securities, for instance, are debt instruments that can be converted into the common stock of the issuer on specific terms.

Issuer derivatives differ from equity derivatives in that issuer derivatives are typically issued by a company on its own equity, whilst equity derivatives are usually issued by market makers on some form of equity (stock, index, etc) belonging, or composed of components belonging to other corporate entities.



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Derivatives have increasingly become very important tools in finance over the last three decades. Many different types of derivatives are now traded actively on ...
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