Forward Contracts mimic the cash-flow of the underlying instruments. Therefore KODIAK Derivatives needs to generate the correct cash-flows for all forward contracts. For contracts with underlying bonds, the system needs to generate and attach all interest payments to the correct forward contracts. For contracts with underlying shares, the system needs to generate and attach all dividend payments to the correct forward contracts.
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- Symbol: market symbol of the share
- Ex Dividend Date: the day on which all shares bought and sold no longer come attached with the right to be paid
- Record Date: the day when you must be on the company's books as a shareholder to receive the dividend.
- Payment Date: When is the dividend payment paid out (and starts bearing interests).
- Dividend per share: Monetary value paid out per share of stock
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When payments are applied to a contract, situations can arise where the payment needs to be transferred from the contract that is being rolled over or partially closed to the new contract being formed as a result of those actions.
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If contract is closed before the payment date of the payment, it should be moved from the closing contract to the new contract so the new contract's price will reflect the change in price following the payment.
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