Page 10 - PRIAA Glossary

ASSOCIATED GAS
Natural gas found in a crude oil reservoir, separate from, or in solution with, the oil.
ASSOCIATION FOR FINANCIAL MARKETS IN EUROPE (AFME)
Formed in November 2009, consequent to the merger of the London Investment Banking Association and the European arm of the Securities Industries and Financial Markets Association. The AFME’s main objectives are: 1) To act as a bridge between financial markets, regulators and the public. 2) To increase transparency, harmonisation, public trust and stability of the financial markets.
AT THE MONEY
An option whose strike price is equal to the current market price of the underlying. This option has no intrinsic value, but it may have time value.
ATLAS
A mountain range option where the best and worst performing underlying assets are removed from the basket and the payout is calculated by reference to the performance of the remaining underlying assets in the basket.
ATTACHMENT POINT
The trigger point at which a tranche becomes exposed
to losses-due-to-default in the underlying portfolio. For example, a 3-7% tranche has an attachment point of
3%. Until the accumulated losses-due-to-default of the underlying portfolio reach 3% of the total initial pool, the tranche will not be affected. However, any further loss (beyond 3%) will be deducted from the tranche’s notional, until losses reach the 7% detachment point.
ATTRIBUTION
When analysing portfolio returns or risk, the process of understanding the source of variance in either an absolute sense or between the portfolio against its applicable benchmark returns or risk. Basically decomposing the source of the active return or risk of the portfolio against its benchmark.
8