# Notional Property

The *Notional *property is only required for bond derivatives. We are only concerned with sovereign bond positions (and derivatives on sovereign bonds), where clients use them in short selling and are subject to the EU Short Selling Regime. The notional amounts of bond derivatives are not used in our standard shareholding disclosure rules.

## What is the *Notional *Property?

The *Notional *property captures the value of the derivative in terms of the face value of the underlying debt instrument.

The official definition is the reference value of the derivative/bond-fund instrument (in instrument currency) in terms of the underlying debt instruments. Applies to derivatives on bonds, derivatives on bond indices or holdings of sovereign bond funds. This may be the face value or a multiple of the face value of the underlying debt. For bond funds or bond indices, this will be the sum of the individual bond constituent holding values (not market values) in a common currency.

To put it another way, the *Notional *property captures the total face value of the derivative in the instrumentâ€™s currency.

If the derivative represents one of the underlying, the *Notional *of the derivative is the face value. However, if the derivative represents a number of the underlying instruments, then a multiple of the face value is used.

## What is the Difference between *Notional *and *ContractSize*?

*ContractSize *refers to the actual NUMBER of underlying instruments represented by a derivative, whereas *Notional *refers to the FACE VALUE represented by the derivative in instrument currency.

Data providers provide notional in the form of a value, which is why we have defined the *Notional *property this way.

## Examples

Consider the case of a bond future.

The *Notional *would be the value of "how much underlying debt" the derivative represents. If the future represents "one bond", then the *Notional *of that future should be equal to the face value of the underlying bond. If, in that same example, the future represents 10 bonds, then the *Notional *of the future would be 10x the face value.

For another example, consider a future on an index of 10 bonds. If each individual bond has a face value of 100, the *Notional *of the future will be 1000.