Banking Terms - Set 18 (At the money, Data vendor, SEDOL, Default Option)

Default Option

Some Corporate Actions require response/instruction from the shareholder to decide the course of action. So, in this case there is a Default option that refers to the course of action that will be taken in case no instruction is received from the shareholder as to what decision will be made.

For e.g. In a dividend issue, company is willing to issue the same either in CASH or as ADDITIONAL SHARES and it needs an instruction from the shareholder to proceed further. In case, if there is no response from the shareholder, it says dividend will be distributed as CASH by default.

SEDOL

SEDOL stands for Stock Exchange Daily Official List, and serves as the National Securities Identifying Number for all securities issued in the United Kingdom and are therefore part of the security's ISIN as well. The numbers are assigned by the London Stock Exchange on request by the security issuer.
The SEDOL Master file (SMF) provides reference data on millions of global multi-asset securities each uniquely identified at the market level using a universal SEDOL code.

Data Vendor

A company that sells information about corporate actions event to the financial services industry.

e.g. DTCC is a vendor agency which passes on information about the corporate action happening across to the servicing industries like JP Morgan, BNYM etc.

At the Money

One of the three forms of moneyness of a derivative (in-the-money, at-the-money and out-of-the-money).
When "at-the-money", the price of the underlying security is exactly same as the strike price of the derivative.
Also said as, a situation where the exercise price of a call/put option/a warrant is equal to the current market price of the underlying instrument.

Cum (Ex)

Cum stands for "with" in Latin. When one is trading shares "cum", it means that one is trading the shares "along with" the entitlements to a certain corporate action event.

When one is trading shares "ex", it means that one is trading the shares "without" the entitlements to a certain corporate action event.
It can be associated with Ex-Date. For example, in a normal cash dividend, if the ex-date is 01.08.2013 then the stock will trade without the right to the cash dividend from the 01.08.2013 onwards.