Simple arbitrage, Financial Management

Simple Arbitrage

The easiest arbitrage opportunities in the option market exist when options violate simple pricing bounds. No option, for example, should sell for less than its exercise value.

With a call option: Value of call > Value of Underlying Asset - Strike Price

With a put option: Value of put > Strike Price - Worth of Underlying Asset

 

 

Posted Date: 7/25/2012 7:26:03 AM | Location : United States







Related Discussions:- Simple arbitrage, Assignment Help, Ask Question on Simple arbitrage, Get Answer, Expert's Help, Simple arbitrage Discussions

Write discussion on Simple arbitrage
Your posts are moderated
Related Questions
Calculate the amplitude of the DC component: A periodic voltage consists of sinusoidal pulses having an amplitude of 150 V (SEE DIAGRAM BELOW). Use Fourier Series Expansion to

You deposit $500 today in a savings account that pays 3.5% interest, compounded annually. How much will your account be worth at the end of 25 years?

SEC Filings -Informational and financial DISCLOSURES required by SEC in order to comply with many sections of the Securities Act of 1933 and Securities and Exchange Act of1934. A n

International Finance Problem Analyze the attached case, along the lines indicated by the Assignment questions listed at the end of the case.  Since you will have plenty of tim

Yang Su is considering the following information on two stocks:                                                                              Rate of Return State of Economy

Above the line deductions are certain kinds of deductions that are deducted from your income before the adjusted gross income is computed for tax purposes. Above the line deduct

What is an annuity? An annuity is a sequence of equal cash flows, spaced consistently over time.

Q. Explain Discounting or Present Value Concept? Discounting or Present Value Concept: - According to this concept rupee one of today is more valuable than rupee one a year lat

Just as any other financial market, money market also involves transfer of funds in exchange for financial assets. Because of the nature of the money market, the

Assume you manage a $4.42 million fund that having of four stocks with the following investments: Stock Investment Beta A