How To Fix RY089 - The underlying of a Bermuda option cannot have an underlying itself

SAP Error Message - Details

• Message type: E = Error

• Message class: RY - Messages for RM Basis

• Message number: 089

• Message text: The underlying of a Bermuda option cannot have an underlying itself

What causes this issue?

The hierarchy for a Bermuda option is restrictive.
In a Bermuda option hierarchy, under each Bermuda option there can be
only one additional Bermuda option, right down to the last Bermuda
option in the hierarchy. Under this last Bermuda option in the hierarchy
, there must be precisely one underlying.
However, you can create a hierarchy containing any number of Bermuda
options.
But your hierarchy must have the following structure:
Bermuda option
,,,, |_Bermuda option
,, |_Bermuda option
,,,, |_Underlying

The system issues an error message and will not allow you to continue with this transaction until the error is resolved.

This type of hierarchy is not permitted:
Bermuda option
,,,,|_Bermuda option
,,,, |_Bermuda option
,,,, |_Underlying
,,,, |_Underlying
Bermuda option
,,,, |_Bermuda option
,,,,,,,, |_Bermuda option
,,,,,,,, |_Underlying,,

System Response

How to fix this error?

Correct your hierarchy for the generic transaction.

Procedure for System Administrators

Error message extract from SAP system. Copyright SAP SE.

Smart SAP Assistant

• What is the cause and solution for SAP error message RY089 - The underlying of a Bermuda option cannot have an underlying itself ?

  The SAP error message RY089, which states "The underlying of a Bermuda option cannot have an underlying itself," typically occurs in the context of financial derivatives, specifically when dealing with Bermuda options in SAP's financial systems. Here's a breakdown of the cause, potential solutions, and related information:
  Cause:
  
  
  Bermuda Options Structure: Bermuda options are a type of exotic option that can be exercised on specific dates before expiration. They are more complex than standard European or American options. The error indicates that the system is trying to assign an underlying asset to a Bermuda option that already has an underlying asset assigned to it, which is not allowed.
  
  
  Incorrect Configuration: The error may arise from incorrect configuration or data entry in the system where the underlying asset for the Bermuda option is mistakenly set to another option or derivative that itself has an underlying.
  
  
  Data Integrity Issues: There may be issues with the data integrity in the financial instruments setup, leading to a situation where the system cannot process the relationships correctly.
  
  
  Solution:
  
  
  Review Underlying Assets: Check the configuration of the Bermuda option in question. Ensure that the underlying asset is correctly defined and does not reference another option or derivative.
  
  
  Correct Data Entry: If the underlying asset has been incorrectly set, correct the data entry. Make sure that the underlying asset is a valid financial instrument that does not have its own underlying.
  
  
  Consult Documentation: Refer to SAP documentation or guidelines regarding the setup of Bermuda options and their underlying assets. This can provide insights into the correct configuration.
  
  
  System Configuration: If the issue persists, it may be necessary to review the system configuration or consult with an SAP expert or support team to ensure that the system is set up correctly for handling Bermuda options.
  
  
  Testing: After making changes, conduct tests to ensure that the Bermuda option can be processed without triggering the error.
  
  
  Related Information:
  
  SAP Financial Services: Understanding how SAP handles financial instruments, especially derivatives, can provide context for this error.
  Bermuda Options: Familiarize yourself with the characteristics and rules governing Bermuda options, as this knowledge can help in troubleshooting related issues.
  SAP Notes and Support: Check for any SAP Notes related to this error message or similar issues. SAP's support portal may have additional resources or patches that address this specific error.
  
  If the problem continues after following these steps, it may be beneficial to reach out to SAP support for further assistance.