In the Open and Close Caps/Floors panel, you can manually book an open and close trade for a cap and floor. Cap/floor positions can be long or short. If a cap/floor is bought, it is established as a long position. A written cap/floor is treated as a short position.
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This article assumes you are familiar with the entity and security level elections that have been made for processing a cap/floor. For example, you must enter a value for the Net Cap Floor field. If you set this field to Yes, the system nets the buy and sell of a cap/floor security on the same entity into a single position. If you set this field to No, the system treats the buy and sell of a cap/floor security on the same entity as two separate positions. You can access this field using the Create/Edit Entity, Create Master Fund, and Edit Master Fund/Sector panels. Also, if the Primary Amortization/Accretion Rule field is not set to Straight Line, Straight Line Actual, or None, you must set up the Amortization/Accretion Rule at the processing security type level. You can access this field using the create/edit Amortization & Accretion Rules panels. For more information, see Understand Caps and Floors. |
To manually book an open/close trade for a cap/floor:
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