Equity Forward Contract In Alameda

State:
Multi-State
County:
Alameda
Control #:
US-00036DR
Format:
Word; 
Rich Text
Instant download

Description

In equity sharing both parties benefit from the relationship. Equity sharing, also known as housing equity partnership (HEP), gives a person the opportunity to purchase a home even if he cannot afford a mortgage on the whole of the current value. Often the remaining share is held by the house builder, property owner or a housing association. Both parties receive tax benefits. Another advantage is the return on investment for the investor, while for the occupier a home becomes readily available even when funds are insufficient.


This form is a generic example that may be referred to when preparing such a form for your particular state. It is for illustrative purposes only. Local laws should be consulted to determine any specific requirements for such a form in a particular jurisdiction.

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FAQ

Equity Contract means a contract which is valued on the basis of the value of underlying equities or equity indices and includes related derivative contracts.

The forwards vs. futures distinction lies in their trading methods, as forwards are traded over the counter while futures are traded on an exchange. Futures contracts are traded on exchanges and are standardized and regulated.

Forward Contracts can broadly be classified as 'Fixed Date Forward Contracts' and 'Option Forward Contracts'. In Fixed Date Forward Contracts, the buying/selling of foreign exchange takes place at a specified future date i.e. a fixed maturity date.

Let's consider an example to understand how a Forward Rate Agreement works. Suppose Party A enters into a 6-month FRA with Party B. The notional amount is $1 million, and the reference interest rate is 5%. The forward rate agreed upon is 6%.

An example of a forward contract would be a trader who enters into a contract to buy 10 million U.S. dollars in exchange for euros, at a rate of 1.2030, with settlement to occur in three months.

Futures are an obligation (that you get out of by closing the trade) to buy or sell the underlying asset in the future to another party, whereas buying an option provides the right – not the obligation – to buy or sell the underlying asset at a future date.

These two types of contracts are essentially identical; one major difference is that a futures contract is an exchange-traded contract and has fixed terms for the notional amount, length of contract, expiry date etc. whereas an FRA is an over-the-counter (OTC) contract which is a binding agreement between two parties.

A forward contract usually has only one specified delivery date, whereas a futures contract has a range of delivery dates. The forward contract is a custom-made or tailor-made contract, whereas a future contract is standardized in quantity, quality, and delivery date.

A call option provides the right but not the obligation to buy or sell a security. A forward contract is an obligation—i.e. there is no choice. Call options can be purchased on various securities, such as stocks and bonds, as well as commodities.

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Equity Forward Contract In Alameda