Find equivalent derivatives structures. Verify the payoff. Compare the cost.
FESC analyses supported derivatives structures, checks whether alternative representations actually produce the same contractual payoff, and compares their estimated implementation cost.
- Exactness
- exact rational arithmetic, no tolerance
- Alternatives
- equivalent structures searched for you
- Cost
- compared leg by leg, separately
- Execution
- none, by design
Live result from the shipped fixture
EQUIVALENTForward(K=100) ≡ Call(100) − Put(100)
2 net payoff curves plotted. They share one line because they are the same payoff. The dotted curve is the leg of the target and the dashed curves are the legs of the representation shown.
- Exact difference Δ(S) = 0 on every interval
- Target cost 2.35 USD
- Synthetic alternative 2.10 USD −0.25 USD
Quotes are illustrative and not executable. Open the full comparison.
Beyond the textbook identity
Put-call parity is the easy case. Give the workbench a mixed book of calls, puts and forwards and it verifies every equivalent representation it can reach, then prices each one.
One payoff, four representations
A mixed call/put/forward inventory. Put-call parity says several quite different-looking structures are the same trade, and the workbench finds them instead of asking you to enumerate them.
EQUIVALENT 3 verified representations of one payoff
| Representation | Legs | Found by | Estimated cost |
|---|---|---|---|
| Target | + 2 x Call(K=100) − Forward(K=100) + Put(K=100) | the structure you described | 31.00 USD |
| Alternative A cheapest | + Call(K=100) + 2 x Put(K=100) | supplied structure | 30.70 USD |
| Alternative B | + 3 x Call(K=100) − 2 x Forward(K=100) | D3 Put(K) <=> Call(K) - Forward(K) | 31.30 USD |
| Alternative C | + Forward(K=100) + 3 x Put(K=100) | D2 Call(K) <=> Forward(K) + Put(K) | 31.15 USD |
Alternative A is cheaper than the target by 0.30 USD under the supplied quotes. Open the full comparison.
4 net payoff curves plotted. They all land on the same line, which is the finding. Dotted curves are the legs of the target and dashed curves are the legs of the representation shown, and those differ.
How the comparison runs
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Describe the exposure
Signed legs of supported primitives (call, put, cash-settled forward, dated cash) with the contract metadata that makes them what they are: expiry, settlement time, fixing, currency, mechanism, rounding, multiplier.
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Verify equivalent structures
Every generated candidate is reduced to an exact piecewise-linear payoff on the union of both structures' strikes. Equality is exact rational identity, never a sampled chart, a tolerance, or a market price.
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Compare estimated cost
Buys pay the ask, sells receive the bid, fees are charged per contract. Cost lives in its own module: a quote can change the price of a structure, never whether two structures are equivalent.
Why this matters
Two structures can be the same trade and still be a different contract. The workbench keeps those two facts apart, in that order.
- Potentially cheaper representation
- The same payoff may be reachable through a structure whose estimated implementation cost is lower, and the workbench shows the arithmetic leg by leg.
- Contract and specification mismatch detection
- A settlement day, a fixing version, a multiplier, or a rounding stage that differs is enough to refuse equivalence, with the reason named.
- Auditable reasoning
- The result shows the interval table, the metadata gate, and the rewrite path that produced each candidate, so a reviewer can re-derive the verdict.
Shipped examples
4 equivalence cases, 6 refusal cases, and every one runs through the same verifier and the same cost model as your own structure.
- Equivalent pair Synthetic forward The headline case: a cash-settled forward and a long call / short put at the same strike produce exactly the same payoff. EQUIVALENT
- Equivalent pair One payoff, four representations A mixed call/put/forward inventory. Put-call parity says several quite different-looking structures are the same trade, and the workbench finds them instead of asking you to enumerate them. EQUIVALENT
- Equivalent pair Synthetic call A long forward plus a long put at the strike reproduces a call, exactly. EQUIVALENT
- Equivalent pair Forward spread collapses to cash A long forward at K=90 against a short forward at K=110 is exactly the dated cash amount m·(110−90). The sign convention is checked by the verifier, not by hand. EQUIVALENT
- Refused pair Settlement time mismatch Identical payoff shapes, but one leg settles a day later. The payoff identity is real; the contract is not the same trade. NOT EQUIVALENT
- Refused pair Multiplier mismatch (same cash today) One lot of the m=2 contract and two lots of the m=1 contract pay the same cash here, but they are different contracts. Only the metadata gate catches it. NOT EQUIVALENT
- Refused pair Fixing / index mismatch Both structures settle against a BTC index, but not the same index version. Same arithmetic, different fixing source. NOT EQUIVALENT
- Refused pair Settlement currency mismatch The payoff arithmetic matches, the cash unit does not. Equivalent payoffs in different currencies are not the same contract. NOT EQUIVALENT
- Refused pair Settlement mechanism mismatch A dated cash obligation and an index-settled forward both sit inside the demo's supported scope, and they are still not the same contract. NOT EQUIVALENT
- Out of scope Unsupported: daily variation margin as the target When the target itself is outside the supported semantics, the demo refuses up front instead of comparing it to something that merely looks similar. UNSUPPORTED
Built for
Derivatives researchers
Check whether a proposed replication really reproduces the payoff before it reaches a model.
Options market makers
Read off parity alternatives and their estimated entry cost from one quote set.
Structuring and valuation control
Trace a mismatch to the field that caused it instead of arguing about the formula.
Exchange product teams
See how a contract specification change alters what a structure actually pays.
Tell us which problem is real for you
The demo exists to find out which capability matters: cheaper equivalent structures, contract and term-sheet validation, or reference-data QA. What you send is used to prepare the follow-up conversation. No CRM, no analytics, no fingerprinting; submissions reach us as one email each.