Page 152 - PRIAA Glossary

SHOUT OPTION
An option where the buyer has the ability to lock in a price for the underlying asset traded on a business day during the life of the option. The buyer then uses that price in the payout if it is more favourable than the price used to value the option on the expiration date.
SIMULATION
A fictitious representation of reality. For example, using random numbers to represent coin flips.
SLEEVE
An agreement whereby an entity acts as an intermediary between an energy company and its trading counterparties. As the intermediary, the credit sleeve provider will guarantee the energy company’s performance pursuant to all trades between the company and its counterparties. The energy company will pledge collateral and pay a fee for these guarantees.
SMALL AND MEDIUM-SIZED ENTERPRISES (SME)
Companies whose number of employees falls below certain limits. Different countries have different criteria to define an SME. Some of the factors include: number of employees, turnover, etc.
SMALL BANG PROTOCOL
An ISDA protocol, published on 14 July 2009, which extended the auction hardwiring provisions (implemented by the Big Bang Protocol on 8 April 2009) to restructuring credit events. Also known as the July 2009 Supplement.
The CDS Small Bang entails contract changes related to restructuring, alongside separate convention changes to the European corporate CDS.
SNOWBALLS
Structured interest rate derivative transactions where, for an initial term, the coupon is specified. Thereafter, each coupon is defined in terms of the previous coupon. There
is a guaranteed high initial coupon, but coupon payments thereafter are determined by the speed with which the floating rate rises or falls. Snowballs are typically callable.
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