Dividend Stream. The Floating Payment Leg of a Dividend Swap. Swap dividend payment rates. Earlier notes this behaves very like a variance swap but instead of betting in pure variance you take a bet on dividend. What practically in one of these: The difference between th ereal life dividend and the one you think it should be. so I say it should bte 2% over the next 10 years, so I swap 2% for the actual dividend amount So then there is one single payment at the end which nets these up. So in the above example ... they are usually 3 month or 6 month contracts, so if for instance th edividend if quarterly, there might be 2 dividends where the difference is netted up at the end.for example. (Us 1/4ly usually , Eur 6 months). Depends on the company's articles of association etc. e.g. Unilever is 6 mo)/ Structurally, Div Swap corr Swap and Var Swap are structured similarly, with one strike at the beginning. Strike may be expressed in terms of the (price) variance (the variance of the returns) , the correlation between typically 2 underlyers. or the dividend for each of these three types of swap respectively. 17 march Dividend is a flow based on a share, so is this not the same as a Return Swap in that the dividend is the return on the dividend? Also recall that with stocks themselves, there is no comitment by the issuer to pay the dividends. FpML: 'Dividend leg.'; 'Floating Payment Leg of a Dividend Swap.'
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