Posted by R. MAK. on January 10, 2010 ·
In order to measure the bearish or bullish nature of the broad market traders use VIX or volatility Index. In order to do this VIX measure the implied volatility of the S&P 500 index options. The expected volatility of the…
Posted by R. MAK. on August 18, 2009 ·
In this article I have explained you about the lookback option with fixed strike.The option’s strike price is fixed as for the standard European options.It differs in a way that at maturity the option is not exercised at the price: the maximum difference between the optimal underlying asset price and the strike is…
Posted by R. MAK. on August 18, 2009 ·
A type of exotic options with path dependency, among many other kind of options are referred to as the Lookback options. The payoff depends on the optimal (maximum or minimum) underlying asset’s price that occur over the life of the option. By this option the holder is allowed to…
Posted by R. MAK. on August 15, 2009 ·
In the Black-Scholes model, we can find the price of the option by the formulas below. In these, stock price is denoted by S, strike price is denoted by K, time to maturity is denoted by T , dividend rate is denoted by q, risk-free interest rate is denoted by…
Posted by R. MAK. on August 15, 2009 ·
In finance, a binary option is a name given to a type of option where the payoff is either some fixed amount of some asset or nothing at all. There are two main types of binary options and these are…
Posted by R. MAK. on August 9, 2009 ·
In mathematical finance, the quantities that represent the sensitivities of derivatives such as options to a change in underlying parameters on which the value of an instrument or portfolio of financial instruments is dependent are referred to as the Greeks. This name is given to them due to the reason that most common of these sensitivities are…
