What it is:
How it works (Example):
For example, let’s assume that afor of Company XYZ is three months long and is issued on April 1. The standard would be 90 days from , or July 1. However, if the contract has a broken date, it might mature on, say, June 28 or July 2. Alternatively, it might mature in, say, five weeks when the industry standard is 12 weeks.
Why it Matters:
The finance world depends heavily on standardized underlying security to happen at a time in between the standard contract dates.for certain types of contracts. This in turn creates standardized recordkeeping and reporting for investors and the rest of the financial world, and it makes trading easier. When a contract has a broken date, it is sort of a “rogue” and requires extra care both by the financial services firms involved and the investor who holds the security. However, contracts with broken dates can be highly advantageous if an investor expects the optimal price of the