Book Trades for Caps/Floors

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.

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.

To manually book an open/close trade for a cap/floor:

In the Accounting Center, in the left navigation pane, click Transactions > Trades > Book Trade/Rebook Trade > Book Trade.
You see the Book Trade workspace.
Complete the options in the Search Details pane and click Search.
You see the search results based on the criteria you selected.
Select the row with the security you want to trade.
On the Book Trade tab, in the Actions group, click Action Rules, point to Open or Close, and then click Buy (Open Long), Sell (Close Long), Write (Open Short), or Buy to Cover (Close Short).
You see the Open and Close Caps/Floors panel.
Complete the options on the Open and Close Caps/Floors panel.
Click Submit.
Once the trade is booked, it follows all core accounting processes.

Open and Close Caps/Floors Panel Options

The following are the options in the Open and Close Caps/Floors panel. Note options may vary according to your selections.

Option	Tag	Description
Entity Information
Entity ID	1163	Specifies the unique identifier of the entity.
Entity Name	1164	Specifies the name of the entity.
Base Currency	86	Displays the base currency.
Net Caps/Floors	5830	Identifies whether to net cap/floor positions.
Issue Information
Trade Date	35	Specifies the effective date of the trade. The trade date cannot be greater than the post date, accounting date, or settlement date.
Accounting Date	36	Specifies the date the trade is reported and has an effect on the entity's holdings and cash balances. The accounting date must be greater than the trade date.
Monthly Accounting Date	4733	Displays the month end accounting date.
Settlement Date	37	Specifies the date the trade is settled.
Event Type	55	Specifies the business intent of the transaction.
Long/Short Indicator	15	Identifies whether the position is long (L) or short (S).
Cross Reference Type	1234	Displays the cross reference type associated with the security.
Issue Name	961	Displays the name of the security.
Ticker	13	Specifies the trade ticker of the security.
Cross Reference ID	1233	Displays the cross reference identifier associated with the security.
Instrument Type	11	Displays the instrument type.
Security Type	82	Displays the security type of the asset.
Issue Currency	85	Displays the local currency of the security.
Maturity Date	38	Displays the date the final principal payment is due on the security.
Coupon Rate	70	Displays the rate at which the security accrues interest. It is expressed as an annual rate.
Strike Rate	11850	Displays the rate at which you can exercise against the cap/floor.
Accounting Information
Select Values to be Calculated by STAR	7000	Determines whether the system automatically calculates the trade data or allows you to enter it manually. Options include: Traded Interest Calculate None Traded Interest Deferred Income NOTE: If you want to enter traded interest (tag 49) from a trading system or have zero traded interest, select Calculate None.
Accrued Interest Type	3715	Displays the accrued interest type.
Position Contracts	122	Displays the current quantity of the position.
Contracts	40	Specifies the quantity of the open/close adjustment event.
Price per Contract	45	Specifies the price of the security per unit. This should be a clean unit price.
Price	45	Specifies the price of the contract.
Principal	165	Displays the principal amount on the trade.
Implied Commission Indicator	78	Indicates whether there is a commission.
Commission	47	Specifies the commission paid to the broker.
Tax Amount	46	Specifies the taxes paid on the trading of the security.
Stamp Duty	51	Specifies the stamp duty amount on the transaction.
Other Fee	3752	Specifies any additional fees on the transaction.
Traded Interest	49	Specifies the accrued interest bought or sold if the security is traded off market.
Local Net Amount	50	Displays the net amount of the trade based on the following formula: Principle + Fees.
Settlement Currency	63	Displays the currency in which the security is settled.
Settlement Net Amount	64	Displays the actual settled amount of the trade. The value must be greater than zero.
Local to Base FX Rate	87	Displays the asset currency to portfolio base currency exchange rate. It is expressed as units of asset currency to one unit of portfolio base currency.
Base Net Amount	478	Displays the base amount of the trade. This amount is calculated based on the following formula: Local Net Amount / Local to Base FX Rate. The value must be greater than zero.
Lot Selection Method	27	Specifies the lot selection method the system uses to relieve (sell) lots of a security held by the entity. Options include: First In First Out (FIFO). Lots acquired first are sold first. The oldest lot is sold first based on the holding date. If you set the accounting basis Cost Basis Covered Indicator field (tag 2818) to Y, unknown cost lots are relieved first. The oldest cost lot is sold first based on the holding date. Last In First Out (LIFO). Lots acquired last are sold first. The most recent lot is sold first based on the holding date. If multiple lots share the same holding date, the lot with the greatest event sequence is relieved first. The event sequence, set internally by the system, indicates the processing order of transactions within the same position. High Amortized Cost or High Cost (HCLOT). The lots with the highest current cost are sold first. The system uses current unit cost, which includes amortization for debt securities. This method relieves the lots that can generate the maximum loss or the minimal gain. Low Amortized Cost or Low Cost (LCLOT). The lots with the lowest current cost are sold first. The system uses current unit cost, which includes amortization for debt securities. This method relieves the lots that can generate the minimal loss or the maximum gain. High Original Cost (HORIG). The lots with the highest original cost are sold first. The system uses the original unit base cost of the open lots. It relieves the lots that can generate the maximum loss or the minimal gain. Low Original Cost (LORIG). The lots with the lowest original cost are sold first. The system uses the original unit base cost of the open lots. It relieves the lots that can generate the minimal loss or the maximum gain. Identified Lot (IDLOT). The specified lot or lots are sold first, which determines cost and tax implications. You can optimize this option to specific tax situations by selecting the specific lots to be sold. If you select this method, the lower pane in the panel displays lot details for each available lot, as determined by the entity's controlling basis. If no controlling basis exists, it displays lots for the primary basis. You must specify the quantity for one or more lots that you want to relieve. The total quantity you specify for the open lots must match the quantity entered for the total close. The close trade relieves the selected lots in each of the entity's accounting bases, and keeps the lot structures in sync. The system uses the lot's Orig Event ID field (tag 457) to match a single open lot in one basis to corresponding multiple open lots in another basis, as needed. This can occur for lots fractured as a result of wash sale processing. Best Tax. The lots are selected and sold with the objective of taking losses first (short term then long term) and gains last (long term then short term). Lots are sold in the following order: Short term Losses. Lots that reflect a short term loss are sold first, beginning with lots that generate the greatest short term loss down to the least short term loss. Long term Losses. Lots that reflect a long term loss are sold, beginning with lots that generate the greatest long term loss down to the least long term loss. Short term No Gains or Losses. Short term lots that reflect no gain or loss. Long term No Gains or Losses. Long term lots that reflect no gain or loss. Long Term Gains. Lots that reflect a long term gain, beginning with lots that generate the least long term gain up to the greatest long term gain. Short Term Gains. Lots that reflect a short term gain, beginning with lots that generate the least short term gain up to the greatest short term gain. Tax Advantage(TXADV). The lots with the lowest tax liability are sold first to minimize tax liability. Versus Purchases (VSP). The lots are selected and sold based on lot purchase characteristics, such as the target purchase date and the target purchase price. This option must be specified at the trade level. Pro Rata. The lots are selected and sold based on a proportionate allocation. Tax Efficiency. The lots with the lowest tax liability are sold first to minimize tax liability. The system calculates the tax liability based on the manipulation of entity level tax factors for long and short term gains, long and short term losses, and currency gains. The system also incorporates the wash sale disallowance effect and considers the overall tax implications of closing each individual lot. Modified FIFO (MFIFO). The open lots with the same original acquisition date (tag 216) as the close transaction are sold first, starting with the lots with the lowest unit cost local. If there are no open lots with the same acquisition date as the close transaction, or all same day lots have been sold, the oldest open lots are sold first based on the acquisition date. Within a single acquisition date, the lots with the lowest unit cost local are sold first.
Settlement Information
Auto Settle Trade Indicator	58	Indicates whether the system settles the trade, coupon, and miscellaneous income and expenses automatically. If the entity's Auto Settle Indicator field is set to Yes, as specified on the Create/Edit Entity or Create Master Fund panels, the system creates a settlement when the trade is processed. There is no trade to settle date gain/loss. This applies even if the settlement date is in the future. Eagle recommends that you set the Auto Settle Indicator field to No for the entity and trade panels. Options include: Yes. The system automatically settles the trade, coupon, and miscellaneous income and expenses. The system retrieves the settle date FX rate if the local currency does not equal base and generates a trade to settle date gain/loss. No. Default. The system does not automatically settle the trade, coupon, and miscellaneous income and expenses. You must schedule the settlement for these transactions using the Run Contract Cash global panel. Or, manually settle the transactions using the Run Multiple Settlements panel. If you use cash segregation based on actual cash settlements, you can schedule settlements using the Run Cash Auto Match panel and create settlements manually using Cash Matching.
Broker Name	1235	Specifies the name of the primary broker.
Broker Code	88	Specifies the code that represents the broker.
Clearing Broker	1236	Specifies the name of the clearing broker.
Clearing Broker Code	1237	Specifies the code for the clearing broker.
Custodian Bank Name	1146	Specifies the name of the custodian bank responsible for the trade. The field lookup allows you to select the custodians that have bank account relationships defined for the entity or for the composite associated with the entity. When you select a value, the system displays values for the Custody Bank Account Number field, Custody Bank Subaccount field, Cash Account Name field and Cash Account Number field, based on the bank account relationships and cash account relationships that apply to the transaction. NOTE: You must establish a relationship between the custodian bank and your entity prior to booking the trade.
Custodian Bank Code	1240	Specifies the code of the custodian bank.
Custody Bank Account Number	1660	Specifies the custodian bank primary account number. The panel displays the value associated with the selected bank account relationship for the custodian.
Custody Bank Subaccount	1661	Displays the custodian bank subaccount number. When you use cash segregation, the panel displays a value of OTHER as the custodian bank subaccount number for the transaction.
Cash Account Name	11696	Specifies the name of the cash account for the custodian. If you use cash segregation, you hold the cash for the trade in this account for the custody basis. The system displays a cash account name based on the cash account relationships that apply to the transaction, but you can override it. It selects the cash account relationship for the transaction based on the transaction's cash account type, currency, and long/short indicator. The lookup displays valid cash account relationships that apply to the transaction.
Cash Account Number	11697	Specifies the account number of the cash account for the custodian. If you use cash segregation, you hold the cash for the trade in this account for the custody basis. The system displays a cash account number based on the cash account relationships that apply to the transaction, but you can override it. It selects the cash account relationship for the transaction based on the transaction's cash account type, currency, and long/short indicator. The lookup displays valid cash account relationships that apply to the transaction.
Settle Instructions 1	1897	Allows you to add settlement notes.
Settle Instructions 2	1898	Allows you to add settlement notes.
Settle Instructions 3	1899	Allows you to add settlement notes.
Settle Instructions 4	1900	Allows you to add settlement notes.
Settle Location	43	Specifies the location in which the trade is settled.
Other Information
Derivative Elections	56	Specifies the type of derivative. Options include: Hedging Effective Hedging Other Income Generation Replication Other
Original Trade Ticket Number	761	Contains the trade ticket identification number. The system uses it during processing. For example, IDLOT close or cancel events use this number to locate an open lot.
Regulatory Intent	8915	If you now hold the trade in an entity/accounting basis with the new International Financial Reporting Standards (IFRS) regulatory category of Fair Value Profit Loss (FVPL) but previously held the trade in an entity/accounting basis with the old regulatory category of Fair Value Option (FVO) or Held for Trading (HFT), you can identify the old regulatory category specified for the trade at the entity/accounting basis level. You can specify a value for reporting purposes only. Options include: Fair Value Option. Indicates the trade was previously held in a regulatory category of Fair Value Option, used for instruments managed on a fair value basis. Held for Trading. Indicates the trade was previously held in a regulatory category of Held for Trading, used for instruments held with the intent of selling them.
Pending Trade Flag	3695	Specifies whether the trade is eligible for pending trade processing prior to processing by the STAR accounting engine. If you use pending trade processing, the system can assign this value to incoming transactions that meet flagged position rule criteria. Or an incoming transaction can include this value. This field is hidden. Options include Y and N.
Pending Trade Status	3720	Specifies the trade's transaction status for pending trade processing prior to processing by the STAR accounting engine. If you use pending trade processing, the system can assign a value of Pending to incoming transactions that meet flagged position rule criteria. Or an incoming transaction can include a value of Pending or a custom pending transaction status value defined in the PEND_TRD_STATUS code category. The default status is Pending if no status is provided. This field is hidden.
Holding Term	9091	Specifies the holding term for the trade based on the number of days between the original acquisition date (tag 216) and the maturity date (tag 35) on the lot. If you use ledger reporting based on ledger granularity rules to break out accounts by holding term, the system uses this value to identify the holding term for trades related to bonds and preferred stocks. Eagle Accounting's core transaction processing calculates the holding term for you, but you can manually override the value displayed in this field. Eagle Insurance clients that use ledger granularity rules have the system calculate the holding term based on the schedule associated with a lot. Options include: Short Term. Identifies a short term holding. If the Holding Term Method field (tag 11479) in the trade's accounting basis has a value of 90 days, a short term holding term is 91 days to a year. If the Holding Term Method field has a value of 3 months, a short term holding term is 3 full months to a year. Cash Equivalent. Identifies a cash equivalent holding. If the Holding Term Method field (tag 11479) in the trade's accounting basis has a value of 90 days, a cash equivalent holding term is 90 days or less. If the Holding Term Method field has a value of 3 months, a cash equivalent holding term is 3 full months or less.
User Defined Priority	2862	Specifies the user generated number that determines the event sub priority. That is, after the system accounts for the event sequence and corporate action sequence.
Order Number	1092	Specifies the order number of the transaction.