Finance videos for undergraduate level corporate finance and investments classes. Most videos are now arranged in Playlists. Like what you see? Consider enrolling at Pittsburg State University!
you can do three legg boxspreads and GUTS strangles also(very very similar to box spreads and you can diagonal the box spread also(but thats expert level trading)...this dude is a debbie downer n dont know what he talking about 100's millions of dollars moves every day trading boxes incl by RETAIL Traders do these in a PM account
Please see my recent paper "Exact Time Dependent Solutions of Black-Scholes Equation By Lie's Similarity Transformations" International Journal of Business Management and Technology, Vol.8, Issue 4 , July-August 2024
Bond's pay interest semi-annually, so we are adjusting for that. For example, a 10-year 6% coupon bond will pay $30 every 6 months. Therefore, to get the correct answer, you need to adjust the calculator to semi-annual (2 P/Y) and the number of periods to 20 (which at 2 P/Y is 10 years). The coupon then becomes $30. It doesn't make much difference, but will typically change the answer a little bit.
Thank you so very much! I never knew how to use these types of calculators. I would always work the math our by hand and use a simple calculator. I appreciate and have learned how to use this calculator that is now required for my Business Finance class.
Hi, Really loved this. Thanks. I want to calculate the options price on a future date, well before the expiry date. Say, I have purchased an option, which will expire on June 27, 2024. I want to calculate its price on May 30, 2024. Could you please help? If you can upload a video, it will be even better. Thanks.
Send me an email (kevinbracker1@gmail.com) requesting the BS Option Pricing Model spreadsheet and take a look at my BS Option Pricing Model spreadsheet (ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-i0sGAds8ztI.html). I'll get you the spreadsheet.
So true all wrote , wanted help with calculations and jn2024 finding it so useful. Shift button use now understood was struggling so much before to get correct answers. God bless you
I agree. Just bought my HP and I've been banging my head trying to work it out. Set at 2dp was seriously bad. What happened to the good old days when you got a manual with every product. Sound like cutting every cost every where, called greed. Thanks Kevin
The book should still be available, but I don't know if it is downloadable (it's better in the online format due to embedded youtube videos, etc. anyway). You can find it here -- pressbooks.pub/businessfinanceessentials/. Pressbooks changed their terms right as I retired and it would cost more to make it available to download (it was free and now it would be $400 per year). You can download a copy from here -- digitalcommons.pittstate.edu/oer-business/1/ (Click on download)
Volatility refers to the volatility of the underlying stock (or other asset) that the option is based on. For example, if I was buying a call option on TSLA, it would be the volatility of Tesla that I would use. The key though is that it is based on implied volatility (which may be very different than past volatility). There are multiple reasons (including earnings announcements between the time the option is purchased and expires) where implied volatility is your "best guess" as to what the actual volatility will be. That said, it is often close to what it has been over the past few weeks.
Hi Kevin, very interesting. Thanks for the video. One question, why does the strike have to be the conversion price of 22.22 and not the market conversion price of 37.11 (= 1670 market price of bond / 45 shares)?
Jonas -- Here is a link that discusses convertible bonds and the strike price -- www.fe.training/free-resources/financial-markets/convertible-bond/#:~:text=The%20strike%20price%20is%20the,close%20to%20the%20expiry%20date. The idea is that (like the strike price of a call option on a stock), the convertible strike is based on the difference between the convertible's par value divided by the number of shares which you can exchange the bond for at maturity.
Thank you very very much for your quick response. My headache eased immediately ! Why is the calculator set at 2 in the first instance ? And I did state in my last sentence , that the 5% interest was compounded semi-annualy. Was that taken into account in the response and would the figures change ? Thanks again. Bracker is best !
The periods per year sets the compounding (that was setting it to 2 Periods per year for semi-annual compounding). In the last segment, we changed it to 12 P/YR to reflect monthly compounding). The 10-year deferral period allowed the $300,000 we paid for the annuity to compound for 10 years (or 20 semi-annual periods) before beginning to calculate the payments). Note that you need to change BOTH the N (N = years time compounding periods per year) and the P/YR to properly get the calculator to adjust).
Just to let you know that you opened my eyes to the ease of use of the 10b11+ calculator. However I do have a deferred annuity problem with semiannual compounded interest that I would want resolved by the keys to this calculator. It is this : Marc has $300k with which to purchase an ordinary annuity delivering monthly payments for 20 years, after a 10 year period of deferral. What monthly payment will he receive if the undistributed funds earn 5% compounded semiannually ? Bracker is best.
Not sure if I completely follow the question, but based on my impression, he is buying a 30-year semi-annual cash flow stream with $0 distributed in the first 10 years (earning 5% semi-annually) and then over the last 20 years he receives $X monthly (not clear whether this is compounded monthly or semi-annually). So here is the logic: Solve for the FV of the $300K first ==> Set calc to 2 P/Y, 20 N, 5 I/YR, -300000 PV, 0 PMT and SOLVE for FV ==> $491,584.93 Next, solve for PMT (using 5% compounded monthly) ==> Set calc to 12 P/Y, 240 N, 5 I/YR, -491,584.93 PV, 0 FV and SOLVE for PMT ==> $3,244.24.
