Calculate and identify the option and futures Withdrawals Introduction in Equity Derivatives Aaron Brask – 44 (0)20 7773 5487 Internal Use Only Stock Derivatives Stock Overview Clients Products Customer Strategies Barclays Capital 2 Equity Products Like Forward Equity Derivatives Derivatives, Agreement to Buy/Sell Assets at a determined price and term. But futures are trading on a stock market 8 Hull, Chapter 1: introduction P1. T Hedging versus Speculation P1. T Outcry open in relation to E-commerce P1. T Over-the-Counter (OTC) compared to P1 exchange traded markets. T Options, Forwards – Futures P1. T Option and advance payments P1. T Forward-Hedges P1. T arbitration payment P1.
T Abuse of P1 derivatives. T Hulls derivatives P1. T Hedging vs. Speculated Learning Goals: Describe the over-the-counter market, distinguish it from trading on a stock exchange and assess its pros and cons. Distinguish between options, futures and futures. Identify and calculate options and appointment payments. Calculate and compare the earnings of backup policies with futures and options. Calculate and compare payments from speculative strategies with futures and options. Calculate an arbitration payment and describe how the arbitration options temporarily PlanetZim Financial Bank has just entered a position into a derivative contract. Which of the following characteristics of the most derivative position is likely to trade is a case of SPECULATION, as opposed to a case of hedging, arbitration or market-making? (a) If a hedge does not have a basic risk, the result covered is always greater than the unsecured result (b) When an arbitration or hedging is distinguished, the main characteristic of speculation is the use of high leverage (c) although the put options may be used as coverage or insurance; a position in call options implies that the investor speculates rather than d) In Hull, the theoretical price of futures and stock options (by Black-Scholes Merton) depends on the assumption that there is no risk-free arbitrage Peter has $10 to invest (speculate) in an exciting technology company whose share price is currently traded at $20.00 per share.
At-the-money-call options cost $2.50 per option. He wants to compare the difference between buying the stock and buying the call options; In one of the two scenarios, he will invest his total of $10,000. If the stock doubles (from $20.00 to $40.00), what is the ratio of earnings between the two alternatives? Please note that the option gain corresponds to the profit minus the upfront costs, and we are not busy here with the current value of the money. (a) 1.0: 1.0; No leverage b) 2.5: 1.0 c) 7.0: 1.0 d) 20.0: 1.0 8 Here is a comparison that illustrates the leverage by options. The Investor has 2000 to 7 options trading strategies In my opinion, the section (only one chapter from Hull) requires some time if you want to be ready. Until now, it has always been included in the review. And, as I mentioned in the FR Audio, to illustrate how we lack a shortcut here, last year GARP asked a question about boxing spreads that totally surprises me, because it`s a really small strategy. As for mechanics, Hull analyzes it in: Asset – option; z.B. Shooting shots, combinations of covered call-spreads While this is a good way to capture them, it is unlikely that you will come across a review issue in this direction. Instead, you want to focus on applications and risk/reward prospects, with a particular focus on Upside/Downside potential. For example, which strategies are long-term volatility? What are the strategies that guide it? That is, benefit from an increase/decrease in the price of assets? What are the capped or unlimited payments? Which ones generate an initial influx of funds? 7 Option Pricing Chapter 11 Options on Futures Stefan Ankirchner University Bonn Last Updated: 13/01/2014 at 14:25 Stefan Ankirchner Option Pricing 1 Agenda Forward Contracts Definition Determining forward AlphaQuest CTA Research Series #1 The objective of this research series is to: some strategies to track the tendency of the CTA black box to demystify and analyze their characteristics both as