Hi Team, I as going through Daml.Finanace.Instrument.Generic document and need some clarification on Generic instrument type. Is it something similar to creating a user defined Instrument? How is it different from bond, equity & token instrument? Also what is the significance of election module in this? Could you please explain all these concepts in details?
Hi @Rocky,
The Generic instrument can be used to model a variety of different payoffs, hence the name.
For instance, our tests use the gessinneric instrument to model an equity forward contract (both cash and physically settled), a bond, a callable bond and an European option.
The payoff is defined in the claims field of the instrument and leverages what we call the contingent claims representation. You can have a look at this section of the documentation for an introduction to the model.
The model also supports optionality, where one of the parties can (or must) make a choice in order to determine the final payoff (you can think of e.g. European or American options). The Election module facilitates the processing of these choices and is used e.g. in the test for the European option.
I hope this helps clarify your questions,
Matteo