Learning Curve

The number of multi-currency exotic options is large and growing.

General Prospectus Delivery Requirement

Many trades are executed in the U.S. markets on behalf of non-U.S. clients who wish to hedge or monetize positions in the American Depositary Receipts or common stock of non-U.S. issuers that trade substantially in the U.S.

A passport option gives the holder a zero-strike call option on the value of a trading account.

In the early days of synthetic collateralized debt obligations, most deals were static.

A recent decision by the Commodity Futures Trading Commission, Khorram Properties v. McDonald Investments, CFTC Docket No. 04-R045 Oct. 13, 2005, addresses the question of whether the line of business exemption created by the CFTC's 1989 Policy Statement Concerning Swap Transactions continues to be viable.

Outperformance options, also known as exchange or spread options are exotic derivatives that allow an investor to gain leveraged exposure to the percentage price performance of one security or index over another.

Law 35/2003 on collective investment trusts, dated Nov. 4, has provided a more flexible regulatory framework for collective-investment institutions-IICs--in Spain.

The recent Delphi settlement auction once again raised the issue of how to settle a credit-default swap contract once a default has occurred.

In June 2005, the International Swaps and Derivatives Association published two template confirmations for credit-default swaps on asset-backed securities:

Warrants and options retuned to China's stock market late this year after regulators prohibited derivatives trading for nearly a decade.

There has been a dramatic increase in the liquidity of index credit and equity volatility products over the past two years.