How is the option hedged
How is the option hedged?
Expert
In such situation the option, being exchange traded, it would probably be marked to market by using the implied volatility, but the final profit will depend upon the realized volatility (assume that be optimistic and assume this is as forecast). Hedging by using implied volatility in the delta formula theoretically removes the otherwise random fluctuations in the mark-to-market value of the hedged option portfolio, other than at the cost of making the last profit path dependent, directly related to realize gamma beside the stock’s path.
Illustrates an example of binomial model as complete market?
what are the factors responsible for the recent surge in international portfolio investment
Where is Performance measures used?
What is Vanna in option value?
Explain the dissimilarities in a cash budget and pro forma financial statements? Why pro forma financial statements are not utilized to forecast cash requirements.
What is an option price?
Described the advantages & disadvantages of the gold standard. The advantages of the gold standard comprise: (I) as the supply of gold is limited, countries cannot comprise high inflation; (2) any BOP disequili
Explain number of dimensions in Monte Carlo method.
Explain how changes occur in Crash Metrics during a crash?
What is the role of earnings and cash while a corporation is deciding how much cash dividends to give to common stockholders?
18,76,764
1960003 Asked
3,689
Active Tutors
1423425
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!