Commentary

D1.806 Meaning of derivative

Corporate tax
Corporate tax | Commentary

D1.806 Meaning of derivative

Corporate tax | Commentary

D1.806 Meaning of derivative

Options

An option contract gives the holder a right, but not an obligation, to buy or sell an underlying asset on or before a specified date1. It includes a warrant, which is an instrument entitling the holder to subscribe for shares or securities of a company. An option does not include an agreement which is to be settled in cash, without delivery of any property; such an agreement is a contract for differences2. However, a contract which provides for delivery of a foreign currency is within the definition of an option—the currency is the property to be delivered, not the means of payment3.

The underlying subject matter of an option is the

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