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This document highlights the specific considerations for Exotic Options. Refer to our other Options Best Practices for details about general Options processing.
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The accounting treatment for Exotic Options is generally the same as Vanilla Options in terms of trade activity and daily valuation. The uniqueness and complexity generally come from the exercise terms, but Eagle Accounting requires that all exercises be instructed because positions are not exercised automatically in any situation (including Vanilla Options).
Reference Data
Security Data
In most cases the Processing Security Type (3931) should be selected based on the underlying: OPOPIX for index, OPOPEQ for single-name equity, OPOPCR for currency, etc. The one caveat is if Eagle Accounting needs to calculate daily variation margin, in which case it should be set OPOPCM regardless of the underlying type.
Exotic Options may have reference data that do not have native equivalents in the core security setup screens because they are not required for accounting. These can be captured for reference and reporting purposes by making local configuration changes to add other fields in the Eagle data model to the security setup screens. The process to add fields depends on your workflow for setting up securities.
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If you are not familiar with the types of local configuration changes mentioned below, please contact your account manager to discuss a professional services engagement. |
Accounting Validation
Accounting validations are applied when securities are set up using one of the following workflows:
Issue Viewer
CSV messages
EagleML (EML) messages with accountingValidationFlag =
Y
Fields must be added using a panel overlay. You can add any tag in pan-addsecmaster.htm, but those are the only tags available. The new tag(s) may also need to be mapped in CSV or EML.
Bypass Accounting Validation
Accounting validations are not applied when securities are set up using one of the following workflows:
Reference Data Center (RDC)
Many accounting validations have equivalents in RDC, but these are applied after data has been submitted and written to the SCRUB tables
EagleML (EML) messages with accountingValidationFlag =
N
Fields must be added to the data strategy. You can add any security-type field available in the Eagle data model. The new tag(s) may also need to be mapped in EML.