EQfoundationinstrument
Equity Forward
Lock a future equity purchase price after funding and dividends.
01Intuition
Build the mental model first.
Carry spot forward: financing raises the forward; dividends lower it.
ONE-LINE DEFINITION
Lock a future equity purchase price after funding and dividends.
02Mathematics
Now make it exact.
Notation and units
Decimal rates and volatilities, year-fraction time and continuous compounding unless stated otherwise.
03Assumptions
Every model has a price.
01
Educational conventions are stated explicitly and may simplify market quotation or settlement details.
02
Rates are continuously compounded unless the section says otherwise.
03
Inputs are deterministic in the base model.
“An unstated convention is a future reconciliation break.”— THEQUANTBATEMAN
04Market use
Why a quant cares.
Forward valuation, futures basis, option parity and dividend-implied analysis.
Intuition→Mathematics→Implementation→Desk risk
05Desk view
FRONT OFFICE VIEW
The hedge has opinions.
Start with the quote convention, then ask which EQ risk survives the hedge. A number without its convention is merely well-dressed ambiguity.
Ask Bateman about this model →06Related