Trading event rights

Distribution tokens trade in their own markets. Buying one gives exposure to a declared corporate action without taking price exposure to the underlying business.

Pricing

A right is worth the payout it will deliver, discounted for the time until delivery and the chance that the terms change.

price = payout x (1 - carry - settlement_risk)

carry            = days_to_payment / 365 x rate
settlement_risk  = (1 - operator_confidence) x weight

Both discounts shrink as the payment date approaches, so a confirmed right converges on its declared payout. That convergence is the return available to a buyer, and it is what the dashed reference line on each event chart measures against.

Implied yield

The implied yield shown in the terminal annualises the declared payout against the price of the underlying. It is a property of the corporate action, not of the rights market, and it is what makes actions comparable across issuers.

Depth and impact

Event-right markets are thinner than the markets for the underlying. Order size is quoted against available depth, and the estimated impact is shown before an order is reviewed. Exiting a large position close to an ex-date can be difficult.

When trading closes