Tag Archives: Options

Capital Guaranteed Products

Capital Guaranteed Products In this article, Shengyu ZHENG (ESSEC Business School, Grande Ecole Program – Master in Management, 2020-2023) explains how capital guaranteed products are built. Motivation for investing in capital-guaranteed products In order to invest the surplus of the … Continue reading

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Forex exchange markets

Forex exchange markets In this article, Nakul PANJABI (ESSEC Business School, Grande Ecole Program – Master in Management, 2021-2024) explains how the foreign exchange markets work. Forex Market Forex trading can be simply defined as exchange of a unit of … Continue reading

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Reverse Convertibles

Reverse Convertibles In this article, Shengyu ZHENG (ESSEC Business School, Grande Ecole Program – Master in Management, 2020-2023) explains reverse convertibles, which are a structured product with a fixed-rate coupon and downside risk. Introduction The financial market has been ever … Continue reading

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Pricing barrier options with simulations and sensitivity analysis with Greeks

Pricing barrier options with simulations and sensitivity analysis with Greeks In this article, Shengyu ZHENG (ESSEC Business School, Grande Ecole Program – Master in Management, 2020-2023) explains the pricing of barrier options with Monte-Carlo simulations and the sensitivity analysis of … Continue reading

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Pricing barrier options with analytical formulas

Pricing barrier options with analytical formulas As is mentioned in the previous post, the frequency of monitoring is one of the determinants of the price of a barrier option. The higher the frequency, the more likely a barrier event would … Continue reading

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Barrier options

Barrier options In this article, Shengyu ZHENG (ESSEC Business School, Grande Ecole Program – Master in Management, 2020-2023) explains barrier options which are the most traded exotic options in derivatives markets. Description Barrier options are path dependent. Their payoffs are … Continue reading

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Implied Volatility

In this article, Jayati WALIA (ESSEC Business School, Grande Ecole Program – Master in Management, 2019-2022) explains how implied volatility is computed from option market prices and a option pricing model. Introduction Volatility is a measure of fluctuations observed in … Continue reading

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Black-Scholes-Merton option pricing model

In this article, Jayati WALIA (ESSEC Business School, Grande Ecole Program – Master in Management, 2019-2022) explains the Black-Scholes-Merton model to price options. The Black-Scholes-Merton model (or the BSM model) is the world’s most popular option pricing model. Developed in … Continue reading

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Protective Put

Protective Put This article written by Akshit GUPTA (ESSEC Business School, Grande Ecole Program – Master in Management, 2019-2022) presents the concept of protective put using option contracts. Introduction Hedging is a strategy implemented by investors to reduce the risk … Continue reading

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Straddle and strangle strategy

Straddle and Strangle This article written by Akshit GUPTA (ESSEC Business School, Grande Ecole Program – Master in Management, 2019-2022) presents the strategies of straddle and strangle based on options. Introduction In financial markets, hedging is implemented by investors to … Continue reading

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