Derivatives · glossary
The amount the payments are worked out on. Nobody lends it, pays it or owes it. Atlas's swap was on €25,000,000, later €15,000,000, yet at its worst it was worth €793,000 to the bank. Definition: Notional Amount · Chapter 1
Explained in Chapter 1, What a Derivative Is, of Derivatives.
Every derivative is built from two figures. The underlying is the number neither party controls, which here is 3-month EURIBOR, the loan's own rate. The notional is the amount that number is applied to. On agreed dates the parties pay each other sums worked out from the two.Read Chapter 1, What a Derivative Is →
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in relation to a Transaction, the amount by reference to which its payments are calculated; the Notional Amount is a figure for counting, and it is never lent, paid or owed;Read the definition in the document →
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This term is part of one complete fictional deal, with every document attached and a test after every chapter. Open Derivatives → · All terms A–Z →