by R. Venkata Subramani | Jun 6, 2009 | Options, Tutorials
Credit card companies in the United States offered sub-prime credit cards usually with lower credit limits and charged high fees and interest rates sometimes as high as 30% or more. With slowdown in economic growth in the United States in 2002, the default rates for...
by R. Venkata Subramani | Jun 1, 2009 | Options, Tutorials
An option is the right, but not the obligation, to buy or sell something at a predetermined price at anytime within a specified time period. Origin of Options: Chicago Board of Options Exchange (CBOE) was created in 1973 and CBOE standardized the option contracts,...
by R. Venkata Subramani | Oct 5, 2007 | Options, Tutorials
Binomial option pricing model is an options valuation method developed by Cox, et al, in 1979. The binomial option pricing model uses an iterative procedure, allowing for the specification of nodes, or points in time, during the time span between the valuation date...
by R. Venkata Subramani | Sep 5, 2007 | Options, Tutorials
The Black-Scholes model is used to calculate a theoretical call price, ignoring dividends paid during the life of the option, using the five key determinants of an option’s price viz., stock price, strike price, volatility, time to expiration, and short-term...
by R. Venkata Subramani | Sep 5, 2007 | Options, Tutorials
Option pricing is based on some key parameters as discussed before in this chapter. To recapitulate essentially the following factors play a key role in determining the theoretical value of an option: Underlying price of the stock Strike price of the option contract...
by R. Venkata Subramani | Aug 5, 2007 | Options, Tutorials
Option pricing is based on some key parameters as discussed before in this chapter. Essentially the following factors, known as ‘Greeks’ should be grasped to understand the option pricing: Delta Gamma Theta Vega Rho Omega These factors are discussed below...
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