Tag Archives | Currency Derivatives

Put Option and Its Payoff Position | Derivatives | Forex Management

The put option gives the buyer the right, but not the obligation, to sell a given quantity of the underlying asset at a given price on or before a given date. The put option gives the buyer the right to sell the underlying asset at the exercise price up to the date of the contract. The seller of put option [...]

By |2017-10-09T08:51:41+05:30October 9, 2017|Options|Comments Off on Put Option and Its Payoff Position | Derivatives | Forex Management

Valuation of Call Option using Black-Scholes Model | Forex Management

Prof. Robert C. Metron and Prof. Myron S. Scholes have been awarded Nobel prize in Economics in 1997 for having developed a pioneering formula for the valuation of derivatives and other stock options. In fact, they developed this method in collaboration with Prof. Fischer Black, who died in 1995. In 1973 Black and Scholes published what has come to be [...]

By |2017-10-09T08:51:41+05:30October 9, 2017|Options|Comments Off on Valuation of Call Option using Black-Scholes Model | Forex Management

Valuation of Embedded Options | Derivatives | Forex Management

For listed options the Black-Scholes model can be directly applied for valuation and it is commonly used by practitioners for such a purpose. However, for options that are not explicitly stated but embedded as part of the condition of another instrument and thus implicit, a less direct method (incorporating the standard binomial model) is commonly used by practitioners. This mode [...]

By |2017-10-09T08:51:41+05:30October 9, 2017|Options|Comments Off on Valuation of Embedded Options | Derivatives | Forex Management
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