A derivative solution is not always required for all problems. However, in the following cases the benefits of using derivatives are:
Non-linear payoffs are inherent functions of options, and are available only through options or option based structures. If you require upside participation combined with downside protection, or are looking for leverage, derivatives are a solution for you.
It is often the case that a company will need to hedge a specific exposure that has unique terms and conditions. The exposure will require a hedge that is tailored in terms of maturity, underlying asset, price and size. Only OTC structured derivatives can provide the flexibility to precisely match exposure.
- Accounting, tax and regulatory structuring
The accounting, tax and regulatory environment are increasing in both importance and complexity. We will review each strategy presented in conjunction with our clients' accounting, tax and regulatory concerns to design the most efficient solution.
Equity derivatives offer mechanisms through which holders of listed shares can either hedge or gear their equity exposures. Alternatively companies may acquire or dispose of exposure to listed equities.