Strike rate

By its specific action EGANAL PSA Cone, prevents unlevel dyeings due to different strike rates of dyes or preferential absorption to various parts of the fiber. 

BURCOLEV HTP represents a unique polyester dyeing auxiliary from Burlington Chemical. By its specific action, BURCOLEV HTP prevents unlevel dyeings due to (a) different strike rates of dyes, (b) preferential absorption of dyes to various parts of the fiber, and (c) temperature variation in the dye machine. 

BURCO PAW is especially effective in promoting level dyeing of cationic dyes which have a medium strike rate, i.e. dyes with combination constants (K-values) between 2.5 and 3.5. 

Leveling agent for cationic dyes. By promoting migration and controlling the dye strike rate, HYDROLEV CAT-7 offers excellent leveling with gradual on-tone build to full yield. 

CINLEVEL PAN gives a unique strike rate with mild retardation of dyes at the critical temp, range of 180 to the boil thereby eliminating costly hold times below the boiling temperature. 

In context with synthetic work on quassinoids, Grieco and coworkers found an even more striking rate enhancement of aqueous Diels-AIder reactions when the diene partner contains a suitably placed ionic substituent (Scheme 57, Table 8). The concentration-dependent increase of rate, yield and endo selectivity observed, particularly, with the sodium salt of dienoic acid (245b) in water (entry 3) was assigned to an entropically favorable interaction of the reactants within an aggregate. 

Ito and coworkers assembled a series of a-mannans working under frozen solvent conditions, and observed striking rate accelerations when compared to the same reactions in fluid media.5 For example, the trisaccharide thioglycoside 14 was coupled to the hexasaccharide 13 at 4 °C with activation by methyl triflate to give the nonasaccharide15 (Scheme 4). When toluene was employed as solvent, after 22 h at 4 °C only 6% of the product was obtained, whereas in frozen xylene under the same... 

In any 6-month period when the EURIBOR setting is below 3%, the interest rate cap struck at 3% is out-of-the-money and does not affect the borrower, who can benefit from the lower rates, especially at the outset. However, whenever EURIBOR fixes above 3%, the interest rate cap pays the difference between the 3% strike rate and the rate prevailing. For example, if EURIBOR fixed at 4%, the company would receive 5,000 from the cap counterparty (assuming a 180-day period), and this sum would bring the effective EURIBOR down from 4% to 3% for that period. 

The diagram highlights for each caplet the difference between the option period and the protection period. For example, the last caplet has a 4.5 year option period during which interest rates can vary and expose the company to risk. When the caplet expires, the caplet provides compensation over the 6-month protection period if the EURIBOR setting at the outset of that period exceeds the strike rate. 

You can see why a cap is actually a combination of single-period options by thinking about what happens every six months. In our example, the expiry dates of the nine caplets are set to coincide with the company s EURIBOR setting dates. Six months after the loan commences, the rate for the second interest period will be set by reference to the EURIBOR fixing that day. On the same date, the first caplet expires. If EURIBOR is above the strike rate of 3%, the company will exercise the caplet and receive compensation if EURIBOR is lower, the company will simply let the caplet expire worthless. The same process will apply six months later, and so on. 

An interest rate cap is effectively a call on interest rates. If interest rates exceed the strike rate, the cap expires in-the-money. Just as a put option... 

As an example, let s suppose the company bought a 5-year cap with a slightly higher strike rate of 3.50% at an up-front cost of 84 bp, and sold a 2.50% floor to bring in 30bp premium up-front. The premium income from the floor reduces the net cost by 35% to just 54 bp upfront, equivalent to 12 bp per annum if spread over five years. 

As the name suggests, a swaption is an option into a swap. The holder of a swaption has the right, but not the obligation, to enter into a swap at the fixed rate defined by the strike rate of the swaption. 

Exercise style Notional amount Strike rate Underlying swap ... 

A range floater is a combination of a capped and floored note. The investor receives a floating rate, subject to both a maximum and a minimum rate. Effectively, the investor has sold a cap and bought a floor. The net premium paid or received will either detract or enhance the return from the note in-between the two strike rates. 

The strike rate for a vanilla cap is constant throughout, but with step-up and step-down caps the strike rate can vary according to a predefined schedule. If structured appropriately, this can provide a substantial cost saving for customers buying these products. 

The solution is a step-up cap, where the strike rate might be set at 50 bp above the forward rate for each interest period. The strike rate might be 2.75% in the first period, rising to 5.50% for the final six-month period. The up-front premium for such a cap might be just 49 bp (equivalent to just 11 bp p.a.), half the cost compared to 87 bp up-front (19 bp p.a.) for a vanilla cap struck at a level 4%. 

For example, suppose the ratchet cap initially had a strike rate of 3%, and a spread of 50 bp. So long as EURIBOR stayed below 3%, the caplets would expire out-of-the-money, and the strike rate would remain at 3%. The first time that EURIBOR sets above 3%, however, the expiring caplet would result in a payment to the owner of the cap, but the strike rates for all the remaining caplets would be reset to 3.5%. The cap would therefore not pay out again until rates rose to this higher level, whereupon the strike rate would be ratcheted up to 4%, and so on. 

These products include a knock-out or knock-in feature. In addition to the strike rate, there is a barrier level that, if touched, triggers for ... 

This structured derivative is best illustrated by an example. Suppose that, when 6-month EURIBOR was 3%, a borrower purchased a knockout cap with a strike rate of 5%, and a knock-out rate of 1.75%. This cap would behave normally provided EURIBOR stayed above 1.75%. If, however, EURIBOR traded down to 1.75% or lower, the cap would be permanently knocked out, and would provide no further protection, even if rates subsequently rose above 5%. 

These are an attractive product for the borrower who is required (perhaps by mandate) to obtain protection against higher interest rates, but who doesn t think that such protection is really needed. A self-funding cap has no up-front premium payment. Moreover, if interest rates stay below the strike rate, no premium is payable in arrears, either. Only when rates rise through the strike rate is a premium eventually payable, but this is typically double what the vanilla premium would have been. 

As the chart shows, the company s unhedged cost is simply 1% over EURIBOR, reflecting the company s 1% credit margin. With the collar in place, the company s borrowing costs are unaffected when EURIBOR resets in-between the strike rates of 2.59% and 4%. This is because the collar has a zero cost, and neither the cap nor the floor are exercised when EURIBOR stays within this range. If, however, EURIBOR exceeds 4%, the cap compensates the company for the excess interest paid, capping the effective cost at 5%. Similarly, if EURIBOR fixes below 2.59%, the company s borrowing costs are floored at 3.59%. 

Buying a cap to hedge against rates higher than the strike rate... 

Selling a floor at the same strike rate but for a lower notional principal, to match the cap premium exactly. 

If EURIBOR sets above the strike rate of 3.5%, the cap purchased by the company limits the effective borrowing cost to 4.5%, 1% above the cap strike, while the floor for that period expires out-of-the-money. The company s maximum borrowing rate is therefore capped, in the same way as with a zero-cost collar. 

A neat way round this problem is to reduce the fixed rate of the swap below the market s fair rate of 3.00%, and have the swap counterparty make an up-front payment to the investor to restore parity. Reducing the swap rate also means that the strike rate of the payer s swaption must also be reduced in line, which increases the up-front premium payable. 

If the spread rises above 370 bp then the bank can put the bond to the investor at the strike level of 370 bp. The investor will pay out under the option in this case. For example if the spread is 450 bp, then the payout under the option is 80 bp. Therefore the total cost is -80 + 30 bp = -50 bp. The cost of the bond position is therefore 50 bp. The effect in bps is the same as if the investor bought the bond at 400 bp and the price had moved to 450 bp. Alternatively the investor may be able to purchase the bond of the counterparty at the strike rate ... 

Figure 13.1 specifies that the inverse floater has a minimum coupon on 0 percent. The floor is passed on from the note issuer to the swap bank via the swap. This, in eflfect, caps the note holders LIBOR exposure at 7.875 percent (15.75 divided by two). The bank s swap leaves it exposed to a rise in LIBOR above this level. To be fully hedged, the bank must buy an interest rate cap on LIBOR with a strike rate of 7.875 percent. The cap costs 15 basis points, which explains the spread over the coupon rate in the swap structure. 

The Langmuir theory is based on a kinetic principle, that is the rate of adsorption (which is the striking rate at the surface multiplied by a sticking coefficient, sometimes called the accommodation coefficient) is equal to the rate of desorption from the surface. 

Similarly, with the acrylonitrile reaction the 10 mM -cyclodextrin increased the water rate by a factor of 9, while 5 mM a -cyclodextrin slowed it by a factor of 1.2. With the larger anthracene case, even /3-cyclodextrin slowed the water reaction, by a factor of 1.6, since the anthracene filled the cavity and did not permit simultaneous binding of the dienophile. However, the more striking rate effects were seen with the water solvent alone. 

Another example of a striking rate acceleration in a Claisen rearrangement conducted in water is that of 6-P-glycosylallyl vinyl ether ... 

Micellar catalysis in water is not striking rate enhancements greater than 10 have seldom been obtained, and micelles exhibit only limited substrate specificity (in contrast to enzymes). Of particular interest, therefore, is the remarkable rate enhancement which has been observed for the mutarotation of 2,3,4,6-tetramethyl-a-D-glucose (8 in Figure 7) catalysed by alkylammonium carboxylate micelles... 

Among these attributes, concentration, temperature, pH and conductivity are measured directly, and the exhaustion, maximum rate of exhaustion (strike rate) and the temperature at which the exhaustion accelerates (strike temperature) are derived fi om these measurements. 

Features Controls dye strike rate replaces carrier in high temp, dyeing rec. with Irgasol DA LIq. as dispersant Regulatory DOT nonregulated Properties Liq. 

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