Derivatives Don't Match Up

Thread starter Icebreaker
Start date Oct 24, 2005
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Derivatives Match

In summary, derivatives that do not match up refer to discrepancies or inconsistencies in the values or terms of financial contracts, such as options, futures, or swaps. These discrepancies can arise due to errors, omissions, or differences in interpretation between counterparties or market participants. Such mismatches can lead to financial losses and legal disputes, highlighting the importance of accurate and transparent documentation and communication in derivative transactions.

Oct 24, 2005

Icebreaker

"Let [tex]F(x,y)=( -y/(x^2+y^2),x/(x^2+y^2))[/tex]

(a)Show that [tex]\frac{\partial F_1}{\partial y}=\frac{\partial F_2}{\partial x}[/tex] except at the origin."

Is it me or are they not actually equal?

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Oct 24, 2005

Icebreaker

Nevermind.

What is "Derivatives Don't Match Up"?

"Derivatives Don't Match Up" is a term commonly used in financial markets to describe a situation where the values of two related financial instruments do not correspond as expected.

Why do derivatives not match up?

There are several reasons why derivatives may not match up, including differences in pricing models, market volatility, and human error in recording or reporting the values.

What are the potential consequences of derivatives not matching up?

The consequences of derivatives not matching up can vary depending on the severity of the discrepancy and the specific instruments involved. In some cases, it may lead to financial losses for one or more parties involved, while in others it may simply require adjustments to be made to reconcile the values.

How can derivatives not matching up be prevented?

To prevent derivatives from not matching up, it is important for financial institutions to have accurate and reliable pricing models, as well as robust risk management and internal controls. Regular reconciliation and monitoring of derivative values can also help identify and resolve any discrepancies.

What role do regulators play in ensuring that derivatives match up?

Regulators play a crucial role in overseeing financial markets and ensuring that proper risk management practices are in place to prevent derivatives from not matching up. They also conduct audits and investigations to identify any discrepancies and enforce penalties or sanctions for non-compliance.