Spread Products Sample Clauses
The 'Spread Products' clause defines the terms and conditions governing financial instruments whose value is derived from the difference, or spread, between two or more underlying prices, rates, or indices. This clause typically outlines which types of spread products are covered, such as credit default swaps or interest rate spreads, and specifies the calculation methods, settlement procedures, and any relevant limitations or exclusions. Its core practical function is to ensure both parties have a clear understanding of how spread products are handled within the agreement, thereby reducing ambiguity and mitigating potential disputes related to these complex financial instruments.
Spread Products. 13.6.1. Overview
(a) An Order for a Spread Product represents an offer to enter into both (but not either) a Physical Gas Transaction as a Buyer for delivery at one location and an offer to enter into a second Physical Gas Transaction as a Seller for delivery at another location.
(b) An Order for a Spread Product can be made in the same way as an Order for any other Product.
(c) A Spread Product comprises a Base Product at one location and a Premium Product at the other location.
Spread Products. 13.7.1. Overview
(a) An Order for a Spread Product represents an offer to enter into both (but not either) a Physical Gas Transaction as a Buyer for delivery at one location and an offer to enter into a second Physical Gas Transaction as a Seller for delivery at another location.
(b) An Order for a Spread Product can be made in the same way as an Order for any other Product.
(c) A Spread Product comprises a Base Product at one location and a Premium Product at the other location.
(d) Acceptance of a Spread Product results in a Transaction in each of the Base Product and the Premium Product.
(e) Products are identified as Premium Products and Base Products as a market convention in order to calculate the Price for each Resulting Transaction. This market convention results in the Spread Product having a positive Spread Product Price when the Premium Product has a higher price than the Base Product and a negative Spread Product Price when the Base Product has a higher price than the Premium Product.
Spread Products