Equity

Equity products are written on a share's quoted spot. An option reads the spot and a vol surface and prices by Black-Scholes on the dividend-free forward. A total return swap passes a share's or a basket's return to one side against a funding leg, and is valued on the period under way, with the return and funding accrued from its start to today, undiscounted. Both read the spot and surface from the market, as equity spots and vols builds them.

Start with How equity products work, then look up the calls on the reference pages.

Pages

Page	What it covers
How equity products work	the forward, Black-76 and barriers, and how a total return swap is valued
Equity option	a European call or put on a dividend-free spot; put-call parity; a single barrier, knock-in against knock-out; the short side
Equity total return swap	a single-name and a basket total return swap; fixed funding; dividends; the payer's side

Common tasks

• Load a vol grid

Where next

The spot and surface are on equity spots and vols, and the same surface on a listed contract is on bond future option.