Compound Options
Compound Options (Words<500)
A compound option is an option on another option. A split-free or compound option is an option for wh...
Tag Archives: derivatives
10
Jan
Black-Scholes-Merton Model
Black-Scholes-Merton Model
The Black-Scholes-Merton model is a differential equation used to solve for option prices. The Black-Schole...
04
Jan
Effective Duration
Effective Duration (Words <500)
The duration calculation for bonds that have embedded options is known as effective duration. It he...
21
Dec
Chooser Option
Chooser Option
An option contract that allows the holder to decide the nature of the option i.e., whether the option is a call or put ...
15
Dec
Downside Risk
Downside Risk
Risk is the uncertainty of losing money invested in a security. To measure the risk or volatility of security we use Sta...
01
Dec
Vega in Options Trading
Vega in Options Trading
Vega is the Greek that measures the sensitivity of an option to implied volatility; denoted by the Greek lette...
29
Nov
Foreign Exchange Swap
Foreign Exchange Swap
In 1981, the US-based company IBM and the world bank Initially enter the Foreign Exchange swap agreement with di...
07
Nov
Equity Derivatives
EQUITY DERIVATIVE
An equity derivative is a type of financial instrument. The value of an equity derivative is derived from the price m...
28
Oct
Synthetic Options
Synthetic Options
Options offer a very low-cost method to invest in with less capital, whether in currencies, trading futures, want to ...
26
Oct
Asian options- Benefits and Risks
Asian options-Benefits and Risks
An Asian option is an option type where the payoff depends on the average price of the underlying ass...