In this article, Jayati WALIA (ESSEC Business School, Grande Ecole Program – Master in Management, 2019-2022) explains the Brownian motion and its applications in finance to model asset prices like stocks traded in financial markets. Introduction Stock price movements form a random pattern. The prices fluctuate everyday resulting from market forces like supply and demand, … Read more
In this article, Youssef LOURAOUI (ESSEC Business School, Global Bachelor of Business Administration, 2017-2021) presents the momentum factor, which is based on a risk factor that aims to get exposure to stocks that have a winning tendency in the upside and downside assuming that they will continue to do well in the short term. Another … Read more
Repo Rate In this article, Shruti CHAND (ESSEC Business School, Grande Ecole Program – Master in Management, 2020-2022) elaborates on the concept of repo rate. This read will help you get started with understanding repo rate and its significance. What is Repo? Repurchase rate is the rate at which the financial institutions in a country borrow and … Read more
Online Brokers In this article, Shruti CHAND (ESSEC Business School, Grande Ecole Program – Master in Management, 2020-2022) elaborates on the concept of online brokers. This read will help you get started with understanding online brokers and how it is practiced in today’s world. Introduction A stockbroker is an entity that facilitates trading, that is to say executing … Read more
In this article, Jayati WALIA (ESSEC Business School, Grande Ecole Program – Master in Management, 2019-2022) presents value at risk. Introduction Risk Management is a fundamental pillar of any financial institution to safeguard the investments and hedge against potential losses. The key factor that forms the backbone for any risk management strategy is the measure … Read more
In this article, Jayati WALIA (ESSEC Business School, Grande Ecole Program – Master in Management, 2019-2022) presents plain vanilla options. Introduction An option contract is a financial derivative that gives its holder the right (but not the obligation) to trade an underlying asset at a price and a date set in advance. In finance, plain … Read more
Derivatives Market In this article, Jayati WALIA (ESSEC Business School, Grande Ecole Program – Master in Management, 2019-2022) presents an overview of derivatives market. Introduction A financial market refers to a marketplace where various kinds of financial securities such as stocks, bonds, commodities, etc. are traded. The term ‘market’ can also refer to exchanges that are legal organizations … Read more
This article written by Akshit GUPTA (ESSEC Business School, Master in Management, 2019-2022) presents the subject of call-put parity. Introduction The call-put parity (also written the put-call parity) is a concept introduced in the 1960s by the economist Hans R. Stoll in a paper named “The Relationship Between Put and Call Option Prices”. The call-put … Read more
This article written by Akshit GUPTA (ESSEC Business School, Master in Management, 2019-2022) presents the technical subject of theta, an option Greek used in option pricing and hedging to deal with he passing of time. Introduction Theta is a type of option Greek which is used to compute the sensitivity or rate of change of … Read more
Quantitative Finance: Introduction and Scope In this article, Jayati WALIA (ESSEC Business School, Grande Ecole – Master in Management, 2019-2022) presents an overview of Quantitative Finance. Quantitative Finance: Introduction and Scope Quantitative finance has become an integral part of modern finance with the advent of innovative technologies, trading platforms, mathematical models, and sophisticated algorithms. In lay man terms, … Read more
In this article, Alexandre VERLET (ESSEC Business School, Master in Management, 2017-2021) explains why financial markets invented options and how they function. A historical perspective on options The history of options is surrounded by legends.. This story is linked to human’s desire to control the unpredictable, sometimes to protect himself from it, often to profit … Read more
Cryptocurrencies In this article, Alexandre VERLET (ESSEC Business School, Master in Management, 2017-2021) explores explores the latest and most fashionable investment trend. They are everywhere on the news, in (young) people’s daily conversations, and probably in a corner of your head if you have already invested a bit of money in them. Cryptocurrencies are a daily … Read more
Stock split In this article, Raphaël ROERO DE CORTANZE (ESSEC Business School, Grande Ecole Program – Master in Management, 2018-2022) introduces the specificities of stock splits. Stock split What a stock split? A stock split is a decision by a company’s board of directors to increase the total number of shares by issuing more shares … Read more
This article written by Akshit GUPTA (ESSEC Business School, Grande Ecole Program – Master in Management, 2019-2022) presents an introduction to Options. Introduction Options is a type of derivative which gives the buyer of the option contract the right, but not the obligation, to buy (for a call option) or sell (for a put option) … Read more
This article written by Akshit GUPTA (ESSEC Business School, Grande Ecole Program – Master in Management, 2019-2022) introduces Forward contracts. Introduction Forward contracts form an essential part of the derivatives world and can be a useful tool in hedging against price fluctuations. A forward contract (or simply a ‘forward’) is an agreement between two parties … Read more
This article written by Akshit GUPTA (ESSEC Business School, Grande Ecole Program – Master in Management, 2019-2022) introduces Futures contracts. Introduction The last few decades have witnessed an incredible increase in international trade volume and business due to the globalization wave that has spread across the world causing unforeseeable and rapid fluctuations in financial assets’ … Read more
This article written by Akshit GUPTA (ESSEC Business School, Grande Ecole Program – Master in Management, 2019-2022) presents the job description of an Option Trader. Introduction Options are a type of derivative contracts which give the buyer the right, but not the obligation, to buy (for a call option) or sell (for a put option) … Read more
This article written by Akshit GUPTA (ESSEC Business School, Grande Ecole Program – Master in Management, 2019-2022) presents an introduction to the History of the Options markets. Introduction Options are a type of derivative contracts which give the buyer the right, but not the obligation, to buy or sell an underlying security at a pre-determined … Read more
In this article, Georges WAUBERT introduces you to the job of credit analyst. Within an investment bank, several jobs are directly linked to bonds. Among them is that of credit analyst. What does a credit analyst do? What are the qualities required to be a credit analyst? The missions of a credit analyst Within a bank, the … Read more
WallStreetBets In this article, Shruti CHAND (ESSEC Business School, Grande Ecole Program – Master in Management, 2020-2022) explains what WallStreetBets is about. This read will help you get started with understanding WallStreetBets and understand its impact in the stock market. Meaning of WallStreet Bets On the social media website Reddit, there are specific online communities that are dedicated … Read more