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FIA Extensions
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About valid values in tag "PositionTransactionType"
Francesc Prats / MEFF
16 Dec 2002 5:52AM ETThinking in the Exercise notice functionality, I can see the only possibilities allowed are (tag PositionTransactionType in Position Maintenance Report message):
- Exercise (value "EXR"),
- Do Not Exercise (value "DNE").
Now, let's consider the following situation: We are in the expiration date for an Option contract:
Case 1) If no instructions are received for an specific buyer, then the System will AUTOMATICALLY exercise all the contracts he/she have if the Option ends up as in-the-money. Else, the System will not exercise if ends up as out or at-the-money. So, in this case, sending nothing will be enough.
Case 2) The buyer, during the trading session (settlement price for the underlying is don't know yet so we don't know if the option will end as ITM, ATM or OTM) decides to send instructions to the exercise (for instance "Do not exercise"). Then, 10 minutes later, he/she decides to go back to the automatic option (I mean, only exercise if the option ends as ITM). This case is present, for instance, in MEFF. I think the best way to solve that is adding a NEW VALUE in the tag PositionTransactionType as "Automatic Exercise".
Any thoughts?
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