Step 1: In the Position Name text box, type the appropriate name of your Cap/Floor instrument.
Step 2: In the Comment text box, type any additional notes about the transaction.
Step 3: In the Counterparty menu, type in the Counterparty with whom you are entering the Cap/Floor agreement. You can also click from the list if a counterparty entry already exists.
Step 4: In the Seniority Level menu, click the appropriate Seniority Level, or or order of Cap/Floor payments.
Step 5: In the Notional Amount text box, type the predetermined dollar amount of the Cap/Floor agreement, then click the corresponding currency type from the adjacent currency menu. This is a required command.
Step 6: In the Maturity Date box, click the down arrow, then click the maturity date, or final date of the Cap/Floor agreement. You can also type in the date in the format of Jan 1, 2000. This is a required command.
Step 7: In the Effective Date box, click the down arrow, then click the maturity date, or first date of the Cap/Floor agreement. You can also type in the date in the format of Jan 1, 2000. This is a required command.
Step 8: In the Payment Frequency menu, click the appropriate frequency agreed to with the Counterparty. This is a required command.
Step 9: In the Reference Index menu, click the appropriate index. This is a required command.
Step 10: In the Cap/Floor menu, click Cap or Floor.
Step 11: In the Compounding Frequency menu, click the appropriate frequency applied to the payments. This is a required command.
Step 12: In the Daycount Convention menu, click the appropriate convention used in the payment schedule. The available conventions and corresponding currencies are: Actual/365 HKD, MYR, THB, SGD Actual/360 AUD, CAD, NLG, EUR, FRF, DEM, ITL, PHP, ESP, SEK,CHF, GBP, JPY, USD. This is a required command.
Step 13: In the Strike Rate menu, type the strike rate as either the Cap or Floor in the instrument. The text box automatically extends your entry to six decimal places.
Step 14: In the Last Reset Rate menu, type the rate as indicated by the corresponding Reference Index (as defined in Step 9). The text box automatically extends your entry to six decimal places.
Step 15: In the Business Day Rule menu, click the rule being observed for the Cap/Floor agreement. This is a required command.
Step 16: In the Holiday Locale menu, click the hoiday locale or regional banking calendar being observed for this instrument. For example, calEUR for the European Calendar. This is a required command.
Step 17: In the Discount Curve menu, click the appropriate curve, selecting interbank or treasury for the desired currency. This is a required command.
Step 18: In the Long/Short menu, click to define whether you are a long or short on the contract. This is a required command.