Maturity date of the derivative

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narumaru

Senior Member
China
Hi all. I know what is a maturity date for term deposits or bonds, but what is "Maturity date of the derivative"?

Here is the context:
Maturity date of the derivative (if any): 31 Dec '17 (as to 15,000) and 31 Mar '19 (as to 37,499)
Expiry date of the derivative(if any): 31 Dec '17 and 31 Mar '19
The price specified in the terms of the derivative (if any): Options to acquire ordinary shares at a cash exercise price of NZ$0.63 (as to 37,499) or $1.10 (as to 15,000) each
(Source:Announcements from ikeGPS Group Limited )

To me, it looks like this announcement is about someone acquiring ordinary shares, and I don't think there is a maturity date for ordinary shares, so I don't understand this. Could you help me?

Thanks for your help.:)

narumaru
 
  • owlman5

    Senior Member
    English-US
    Hi, narumaru.

    This definition for "derivative" from our dictionary should help:

    a financial contract whose value derives from the value of underlying stocks, bonds, currencies, commodities, etc.
     

    narumaru

    Senior Member
    China
    Thanks owlman5. So that means, by these dates, 31st Dec 17 and 31 Mar 19, payments will be made to acquire shares?

    So any day between now and by these dates, they are going to make payments to acquire share.

    Thanks for your help.
     

    dojibear

    Senior Member
    English - Northeast US
    This portion of the Disclosure form mentions stock options, not ordinary shares (of stock). Specifically it states that the officer owns:

    15,000 options to buy stock shares at NZ$1.10, expiring 31 Dec'17
    37,499 options to buy stock shares at NZ$0.63, expiring 31 Mar'19

    This seems to be a standardized document, with many lines ending in a colon. They fill in actual values after every colon. There is no line in the standard document for "options" but there are some for "derivatives", so they put the options information on those lines. Technically an option is a derivative of the stock.

    When they filled in the two standard form lines for "maturity date" and "expiry date", they used the expiration dates of the options on both lines.

    It would make sense to call these "maturity dates" if the options cannot be exercised before that date. Most stock options can be exercised at any time before the maturity date.

    And since these are options, the option owner is not required to ever use them to buy stock. If, for example, the stock price (value) is below NZ$0.68, he will not use the options to buy stock. He will let them expire unused.
     

    narumaru

    Senior Member
    China
    Thanks dojibear. I understand very well now. The way you explain this is very clear and easy to understand. Thanks so much:)
     
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