The most comprehensive educational resources for finance

Put Call Parity and Arbitrage Opportunity

In this article, we will look at how we can seek arbitrage opportunities by using the put-call parity equation. As we know, the put-call parity equation is represented as follows: c + PV(K) = p + s If the prices of put and call options available in the market do not follow the above relationship

Introduction to Futures Markets

Tune into this detailed introduction to futures markets. The video will make you familiar with the jargon of futures, who trades them, the leverage and risks in trading futures, how the futures markets are organized and much more. You can also understand why people trade in futures.

Overview of Equity Options – Video

The following video from the options institute at CBOE provides an introduction to equity options Option volume continues to grow year over year. Traders or investors that do not use options in their portfolio may want to consider these additional tools. If you have already decided to begin using options in your trading, this is

Lecture 17 – Options Markets

After introducing the core terms and main ideas of options in the beginning of the lecture, Professor Shiller emphasizes two purposes of options, a theoretical and a behavioral purpose. Subsequently, he provides a graphical representation for the value of a call and a put option, and, in this context, addresses the put-call parity for European

Lecture 15 – Forward and Futures Markets

To begin the lecture, Professor Shiller elaborates on the difference between forwards and futures and on the role of futures markets to infer future prices for the underlying commodity or financial asset. Generalizing the discussion beyond futures markets to derivatives markets, he assesses the issue of speculation in those markets and its impact on capitalist

Difference between Delta and Gamma Hedging

Delta hedging and Gamma hedging are two related concepts but there are differences between the two. In both the cases a portfolio manager is trying to hedge a portfolio of stocks and options from changes in the stock prices by dynamically buying and selling stocks and options. Delta is the first derivative of the option

Characteristics of Successful Options Traders

Despite its many benefits, options trading carries substantial risk of loss, and it is very speculative in nature. It’s not for everyone and not everyone can become a successful options trader. Like any other business, becoming a successful options trader requires a certain skillset, personality type and attitude. This article will help you understand the

Reading the Actual Option Quotes

In this video you will learn about how to read the quotes for real options traded in the market. The video takes the real-time option quotes from CNBC and explains how to read them with common terms such as low, high, volume, open interest, strike price, etc. Video by Khan Academy

Interview for Head Derivatives Trader

The video provides an insight into the kind of greed and money that goes around in investment banking circles. The applicant for the job of head derivatives trader at Lemming Bank makes a lot of money for his current employer using his special software but he will not reveal the name of the special software