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Tag Archives: Options
Analysis of “The Madoff Affair” documentary
Analysis of “The Madoff Affair” documentary In this article, Raphael TRAEN (ESSEC Business School, Global BBA, 2023-2024) analyzes “The Madoff Affair” documentary and explains the key financial concepts related to this documentary. Key characters in the documentary Bernard Madoff: key … Continue reading →
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 →
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 →
Posted in Contributors, Financial techniques
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Tagged Currency swaps, Forex, Forward, Futures, Options
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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 →
Posted in Contributors, Financial techniques
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Tagged Financial markets, Options, Reverse convertibles, Structured products
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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 →
Posted in Contributors, Financial techniques
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Tagged Barrier options, down-and-in, down-and-out, Monte carlo simulations, Option pricing, Options, R file, up-and-in, up-and-out
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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 →
Posted in Contributors, Financial techniques
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Tagged Barrier options, down-and-in, down-and-out, Monte carlo simulations, Option pricing, Options, R file, up-and-in, up-and-out
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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 →
Posted in Contributors, Financial techniques
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Tagged Barrier options, down-and-in, down-and-out, Monte carlo simulations, Options, R file, up-and-in, up-and-out
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1 Comment
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 →
Posted in Contributors, Financial techniques
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Tagged Brownian motion, BSM, Call option, Implied volatility, Options, Put option, Risk, Volatility
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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 →
Posted in Contributors, Financial techniques
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Tagged Brownian motion, BSM model, Call option, Derivatives, Option pricing, Options, Put option
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3 Comments
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 →
Posted in Contributors, Financial techniques
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Tagged Derivatives, Options, protective put, Put option
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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 →
Posted in Contributors, Culture, Financial techniques
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Tagged BSM model, Derivatives, Options, Straddle, Strangle
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Option Spreads
Option Spreads This article written by Akshit GUPTA (ESSEC Business School, Grande Ecole Program – Master in Management, 2019-2022) presents the different option spreads used to hedge a position in financial markets. Introduction In financial markets, hedging is implemented by … Continue reading →
Posted in Contributors, Culture, Financial techniques
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Tagged BSM model, Derivatives, Option spread, Options
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Understanding Options and Options Trading Strategies
Understanding Options and Options Trading Strategies In this article, Luis RAMIREZ (ESSEC Business School, Global BBA, 2019-2023) discusses the fundamentals behind options trading. Financial derivatives In order to understand and grasp the concept of options, knowledge of what is a … Continue reading →
Posted in Contributors, Financial techniques
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Tagged Bear put spread, Bull call spread, Call option, Covered call, Derivatives, Married put, Options, Protective collar, Put option
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Covered call
Covered Call This article written by Akshit GUPTA (ESSEC Business School, Grande Ecole Program – Master in Management, 2019-2022) presents the concept of covered call used in equities option contracts. Introduction Hedging is a strategy implemented by investors to reduce … Continue reading →
Posted in Contributors, Financial techniques
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Tagged BSM model, Call option, Covered call, Delta, Options
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Types of exercise for option contracts
Types of exercise for option contracts This article written by Akshit GUPTA (ESSEC Business School, Grande Ecole Program – Master in Management, 2019-2022) presents the different types of exercise for option contracts. Introduction Exercising a call option contract means the … Continue reading →
Posted in Contributors, Financial techniques
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Tagged Call option, Exercise, Options, Put option
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VIX index
VIX index In this article, Youssef LOURAOUI (ESSEC Business School, Global Bachelor of Business Administration, 2017-2021) presents the VIX index, which is a financial index that measures the uncertainty in the US equity market. This article is structured as follows: … Continue reading →
Posted in Contributors, Financial techniques
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Tagged Implied volatility, Minimum volatility factor, Options, Realized volatility, Risk, Volatility
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Plain Vanilla Options
Plain Vanilla Options 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 … Continue reading →
Posted in Contributors, Financial techniques
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Tagged Call, Derivatives, Options, Put, Risk, Stock prices
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2 Comments
Derivatives Market
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, … Continue reading →
Posted in Contributors, Financial techniques
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Tagged Derivatives, Options, OTC market, Swaps
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1 Comment
The Black Scholes Merton Model
The Black-Scholes-Merton model This article written by Akshit GUPTA (ESSEC Business School, Grande Ecole Program – Master in Management, 2019-2022) presents the Black-Scholes-Merton Model . Introduction Options are one of the most popular derivative contracts used by investors to hedge … Continue reading →
Posted in Contributors, Financial techniques
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Tagged BSM model, Call, Options, Put
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Call – Put Parity
Call-Put Parity 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 … Continue reading →
Posted in Contributors, Financial techniques
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Tagged Call, Call-put parity, Options, Put
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