The Group enters into contracts indexed to Deutsche Bank common shares to acquire shares to satisfy employee share-based compensation awards, and for trading purposes.
At December 31, 2003, the Group had outstanding call options to purchase approximately 3.5 million shares at a weighted-average strike price of € 67.11 per share related to employee share-based compensation awards. The options must be net-cash settled and they mature in less than five years. The fair value of these options amounted to € 37.5 million at December 31, 2003. A € 1 decrease in the price of Deutsche Bank common shares would have reduced the fair value of these options by € 0.8 million.
Related to trading activities, the following derivative contracts that are indexed to Deutsche Bank's own shares are outstanding at December 31, 2003.
| Type of Contract |
Settlement Alternative |
Maturity |
Number of Issuers Sharesto which Contracts are Indexed | Weighted average Strike Price (in €) | Effect of Decrease of Share Price by € 1 (€ in thousands) | Fair Value of Contract Asset (Liability) (€ in thousands) |
| Purchased Options |
Net-cash |
Up to 3 months |
1,610,900 | 54.63 | (300) | 14,239 |
|
> 3 months – 1 year |
1,681,567 | 64.38 | (693) | 15,899 | ||
|
> 1 year – 5 years |
5,495,842 | 66,73 | (1,259) | 37,148 | ||
| Sold Options |
Net-cash |
Up to 3 months |
12,833,072 | 91.27 | 516 | (6,059) |
|
> 3 months – 1 year |
3,416,600 | 58,21 | 209 | (20,425) | ||
|
> 1 year – 5 years |
1,311,213 | 65,35 | 1,282 | (1,354) | ||
| Forward Purchases |
Deutsche Bank choice |
Up to 3 months |
12,000,000 | 59.25 | (12,000) | 76,115 |
|
Net-cash/ |
> 3 months – 1 year |
29,779,780 | 66.25 | (29,780) | (33,357) | |
|
physical1 |
>1 year – 5 years |
3,720,220 | 69 | (3,720) | (15,130) | |
| Forward Sales |
Counterparty choice |
|||||
|
Net-cash/ |
> 3 months – 1 year |
3,067,276 | 72.76 | 3,067 | 26,954 | |
|
physical1 |
> 1 year – 5 years |
41,195,879 | 50.65 | 41,196 | (474,562) | |
| 1 | Fair values do not differ significantly relating to settlement alternatives. |
The above contracts related to trading activities are accounted for as trading assets and liabilities and are thus carried at fair value with changes in fair value recorded in earnings.