Search results

In reference to R19.P1.T3.FIN_PRODS_HULL_Ch26_ExoticOptions_Topic: UP-and-OUT Barrier-Options:- Are UP-and-OUT Barrier-Options = PUT Options ? or can they be CALL Options too ..? If they are CALL Options, why would one want to limit the Payoff and Profit by putting a cap on the upward movement...

@ShaktiRathore Lakho Sukhriya !:) Exactly what I was missing - Thanks a million !!!!!!!!!!!!

In reference to R19.P1.T3.FIN_PRODS_HULL_Ch26_ExoticOptions_Topic:Exchange-Options:- I am trying to understand what the section circled in red means. I have understood Exchange Options and their Payoff formula and also the pricing formula but not quite sure why:- Min ( Ut, Vt) = Vt - Max ( Vt -...

@ShaktiRathore Thanks so very much for sharing this insight buddy ! :-)

In reference to R19.P1.T3.FIN_PRODS_HULL_Ch26_ExoticDrivatives_Topic:Zero-Cost-Derivatives:- I am trying to understand how "Any derivative can be converted into a zero-cost product by deferring payment until maturity" If c is the cost of the option when payment is made at time zero, then A =...

DELETED

@David Harper CFA FRM Thanks so much for this insight ! :-) Just had my AHA Moment ! :-)

@David Harper CFA FRM Thanks so much as usual for looking into this. Much gratitude :-) Will dig back into this one shortly :-)

In reference to R19.P1.T3.FIN_PRODS_HULL_Ch10_Put_Option_Max & Min Values:- I am having some trouble with the Max and Min Values of American & European Put Options. Since an American option can be exercised at any time, Max Value of an American PUT, P <= K . However, for a European option...

In reference to R19.P1.T3.FIN_PRODS_HULL_Ch7_Currency_Swap_Valuation Eg2:- Currency Swap Valuation -Eg 1 in the prior tab is perfectly good. But I had some questions on the 2nd Example for the Currency Swap Valuation. I see 2 different Net Swap Values for the 2 methodologies - $ 2.71 in the...

@David Harper CFA FRM Thanks so much. My apologies..am trying to connect all the dots.... Definitely becomes simpler if the Income component in Hull 5.3 is re-phrased as 1.96% of the Spot... Wanted to understand though...how were you able to reverse engineer and get the nos... the equivalent...

Thanks @Deepak Chitnis Am worried that I might be missing a crucial conceptual point....in the mind am thinking whether the "type" of the underlying asset has something to do with this...but just to get my concepts and all nuances straight, will wait for the Boss :) @David Harper to share his...

@David Harper CFA FRM Have a follow up question on this ... In Hull Eg 5.3:- "Example 5.3: Consider a 6-month forward contract on an asset that is expected to provide income equal to 2% of the asset price once during a 6-month period. The riskfree rate of interest (with continuous compounding)...

@David Harper CFA FRM Thanks so much David - you're the kindest and the most knowledgable !Bless your heart :-)

@David Harper CFA FRM Thanks so much - gratitude :) :) Also my apologies for the ignorance ...I have BT as my only guiding star :) and the GARP Books....so missed the reference...hate to bother you guys over trivial questions.... :confused:

In reference to R19.P1.T3.FIN_PRODS_HULL_Ch5_Cash_Or_Carry_Learning_Spreadsheet:- In the Associated Learning Spreadsheet to illustrate the Cash and Carry Model, tab 3b.4 Hull_Ch5 (COC): For the Col F- Hull Example- 10 Month Forward On Stock with 3 Dividends, How are we calculating the PV of...

@David Harper CFA FRM Thanks so very much for this detailed insight...Thank you :-)

@David Harper CFA FRM Hi David, I have a followup question on this topic :- In the scenario that the Basis strengthens due to an increase in the Spot Price( instead of the Futures Price going down), then in that case how is still favorable for Shorting the Futures and in turn a Short Hedge...

@David Harper CFA FRM Thank you Thank you Thank you :-) for the elaborate explanation....clear as the sky now :-) the guess you were referring to the 2 positions in the context of the Weakening and Strengthening of the Basis .... the above clarifies everything.... :-)

@David Harper CFA FRM Much gratitude. Have a follow up question though...i guess ...the point am struggling with .... So a Short Hedge = a Short Position on the Futures Contract and a Long Hedge = a Long Position on the Futures Contract But a Short Hedge can be used with either a Long Spot or a...