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The notional amount (or notional principal amount or notional value) on a financial instrument is the nominal or face amount that is used to calculate payments made on that instrument. This amount generally does not change hands and is thus referred to as .
Contrast a bond with an :
In a bond, the buyer pays the principal amount at issue (start), then receives coupons (computed off this principal) over the life of the bond, then receives the principal back at maturity (end).
In a swap, no principal changes hands at inception (start) or expiry (end), and in the meantime, interest payments are computed based on a notional amount, which acts as if it were the
of a bond, hence the term notional principal amount, abbreviated to notional.
In simple terms the notional principal amount is essentially how much of the asset or bonds a person has. For example, if a premium bond was bought for ?1 then the notional principal amount would be the face value amount of premium bond that your ?1 was able to purchase. Hence the notional principal amount is the quantity of the assets and bonds.
In the context of an , the notional principal amount is the specified amount on which the exchanged interes this could be 8000 US dollars, or 2.7 million pounds sterling, or any other combination of a number and a currency. Each period's rates are multiplied by the notional principal amount to determine the height and currency of each counter-party's payment. A notional principal amount is the amount used as a reference to calculate the amount of interest due on an 'interest only class' which is not entitled to any principal.
In a typical , one party pays a fixed or floating rate multiplied by a notional principal amount plus the depreciation, if any, in a notional amount of property in exchange for payments by the other party of the appreciation, if any, on the same notional amount of property. For example, assume the underlying property is the S&P 500 stock index. A would pay B
times a $100 notional amount plus depreciation, if any, on a $100 notional investment in the S&P 500 index. B would pay A the appreciation, if any, in the same notional S&P 500 investment.
Shares also have a notional principal amount but it is called nominal instead of notional.
If you are buying stock option contracts, for example, those contracts could potentially give you a lot more shares than you could control by buying shares outright. So the Notional Value is the value of what you control rather than the value of what you own.
So, for instance, if you purchase a 100 share equity call option with a strike of $60 for a stock that is currently trading at $60, then you have the same upside potential as someone who holds $6,000 of stock (1 option * 100 multiplier * $60), but you may have paid only $5/share (for a total of $500), so by this measure you have achieved
of $6,000/$500 = 12x. Note that if the stock price moves to $70, your dollar notional is now $7,000 (- cost of option and commission differential), but your quantity (unit notional) is still 1 contract.
In FX derivatives, such as forwards or options, there are two notionals. Suppose you have a call option on USD/JPY struck at 110, and you buy one of these. Then this gives you the option to pay 100 USD and receive 110 x 100 = 11,000 JPY, so the USD notional is 100 USD, and the JPY notional is 11,000 JPY.
Note that the ratio of notionals is exactly the strike, and thus if you move the strike, you must change one or the other notional. For instance, if you move the strike to 100, then if you hold the USD fixed at 100, the JPY notional becomes 10,000: you will pay the same number of USD, and receive fewer JPY. Alternatively, you could hold JPY constant at 11,000 and change the USD notional to 110: you pay more USD and receive the same number of JPY (you've changed the price of JPY, denominated in USD).
When hedging a foreign currency exposure, (say for an American USD business, an outflow of 11,000 JPY) it is the foreign currency notional that must be fixed.
Main article:
track underlying positions, so an investment performs equivalently to purchasing that number of physical positions, though the fund may in fact not directly purchase the positions, and instead use derivatives (especially futures) to produce the position.
Levered ETFs, notably , have the unusual property that their notional changes every day: this is because they pay the compounded daily return, so it is as if one were re-investing each day's earnings at the new daily price: if one has an inverse ETF in an asset that goes down, one has more money, which one uses to short a cheaper asset, hence one's unit notional goes up, and conversely if the asset has gone up in value. See
for mathematical details.
Sold at par.
A different measure of leverage would be your .
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notional amount是什么意思
中文翻译百科解释承作金额暂定款项:&&&&adj. 1.观念上的；概念上的，抽象的，纯理论的；想像 ...:&&&&vi. 1.总计，共计，合计 (to)。 2.相当于，等 ...
例句与用法1.The notional amount of outstanding derivatives contracts at end march 1995 was us 1 . 6 trillion迄一九九五年三月底，未平仓衍生投资工具合约名义金额为1 . 6万亿美元。 2.These credit derivatives have exploded in recent years , to an outstanding notional amount of $ 43 trillion这类金融衍生品近年来迅速兴起，达到了43万亿美元辉煌记录。 3.These credit derivatives have exploded in recent years , to an outstanding notional amount of $ 43 trillion这类信用衍生物近年来发展迅速，目前价值达到4300万亿这个令人吃惊的数目。 4.On top of that , the otc derivative contracts had a daily turnover of us 1 . 3 trillion in 1998 , and the notional amounts outstanding at end - june 1998 came to us 72 trillion除此以外， 1998年的场外衍生工具合约的每日交投量为13 , 000亿美元，截至1998年6月底的未平仓名义总额达720 , 000亿美元。 5.If the cost of purchasing the options in " the strategy " exceed the amount which " the strategy " has to notionally purchase such options , the notional amount on the options will be scaled down by a factor , known as position adjustment factor若按“策略”购买该期权的本金超出按此“策略”必须名义购买这些期权的交易量，则该期权的名义交易量将按一定比例下降，这个比例被称为持仓调整因素。 6.If the cost of purchasing the options in " the strategy " exceed the amount which " the strategy " has to notionally purchase such options , the notional amount on the options will be scaled down by a factor , known as position adjustment factor如果《策略》中的购买项目的总金额超过了《策略》规定的名义采购项目的总金额，就要将项目的名义总额乘以一个比例缩减因数，该因数被称为“情况调整因数” 。
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