Posts Tagged ‘Derivatives’
May 27, 2013 | 
Author
tastytrade explains how the Black-Scholes model assumes that underlyings move according to a geometric brownian motion. Other option pricing approaches use discrete approximations to geometric…
http://www.kanjoh.com. disclaimer – none of these videos is meant to be personalized financial advice.
Posted in Derivatives | 
Tags: Advanced, Brownian, Derivatives, Geometric, Motion, Option, Trading | 
28 Comments »
Concavity and Second Derivatives – Examples of using the second derivative to determine where a function is concave up or concave down. For more free videos, visit PatrickJMT.com Austin Math Tutor, Austin Math Tutoring, Austin Algebra Tutor, Austin Calculus Tutor
Learn more: www.khanacademy.org More on partial derivatives
Video Rating: 4 / 5
Calculus finds the relationship between the distance traveled and the speed – easy for constant speed, not so easy for changing speed. Professor Strang is finding the “rate of change” and the “slope of a curve” and the “derivative of a function.” View the complete course at: ocw.mit.edu License: Creative Commons BY-NC-SA More information at ocw.mit.edu More courses at ocw.mit.edu Subtitles are provided through the generous assistance of Jimmy Ren.
Video Rating: 5 / 5
For more FREE math videos, visit PatrickJMT.com !! Derivatives of Exponential Functions – I give the basic formulas and do a few examples involving derivatives of exponential functions.
Video Rating: 4 / 5
Learn more: www.khanacademy.org Introduction to partial derivatives.
Video Rating: 4 / 5
Source Links and video text for Today’s Items are located at hyperreport.org All content contained on the Hyper Report, and attached video is provided for informational and entertainment purposes only. ‘Hyper Report’ assumes all information to be truthful and reliable; however, the content in this video is provided without any warranty, express or implied. No material here constitutes “Investment advice” nor is it a recommendation to buy or sell any financial instrument, including but not limited to stocks, commodities, corporation, options, bonds, futures, or intrinsically valueless Federal Reserve Notes. Any actions you, the reader/listener, take as a consequence of any analysis, opinion, or advertisement on this video is your sole responsibility. Thank you.
Video Rating: 4 / 5
Basic derivatives, calculus, inverse trig
Video Rating: 0 / 5
In this edition of the show Max interviews Rob Kirby from KirbyAnalytics.com. He talks about the role of derivatives in creating and sustaining the ongoing financial crisis. Rob Kirby received his post secondary education at York University [Economics] in Toronto. Upon completion he worked on an institutional trading desk for most of the 1980s and right up until 1996. Mr. Kirby began writing in 1997 and was involved in a number of entrepreneurial pursuits. In 2002, he went to work for Investor’s Group, the largest Mutual Fund Company in Canada until September ’04 when he resigned to write about the markets. Watch this video on our Website: www.presstv.com Follow our Facebook on: www.facebook.com Follow our Twitter on: twitter.com
Video Rating: 4 / 5
Here’s Part 1 of my in-depth interview with author David Quintieri about the Derivatives nightmare, which is a blatant Wall Street fraud that goes far beyond the fraud of fractional reserve banking. Derivatives are the titanic of the world’s financial system and we have already hit the iceberg. With more than 00 Trillion in outstanding Derivatives worldwide, the system cannot be “unwound” and it’s impossible to save. David’s site: themoneygps.com My website: SGTreport.com Music: “Stormfront” byKevin MacLeod (incompetech.com) Licensed under Creative Commons “Attribution 3.0″ creativecommons.org creativecommons.org The content in my videos and on the SGTbull07 channel are provided for informational purposes only. Use the information found in my videos as a starting point for conducting your own research and conduct your own due diligence (DD) BEFORE making any significant investing decisions. SGTbull07 assumes all information to be truthful and reliable; however, I cannot and do not warrant or guarantee the accuracy of this information. Thank you.
Posted in Derivatives | Tags: Banking, Beyond, Derivatives, Fractional, Fraud, NIGHTMARE, Part, Reserve | 34 Comments »
The coming collapse.
Richard Nixon took the USA off the gold standard in 1973. Bill Clinton got rid of Glass Steagull in 1999, which took down the separation between the activities of Investment Banks (non-secured) and activities of Commercial Banks (FDIC Secured – tax payer secured). Wall Street and the world of finance have since become a global casino dealing derivatives now estimated at 1.4 quadrillion dollars from only billions fifteen years ago. Bloomberg News reported a secret cabal runs the world of finance. A world market correction and subsequent economic depression as the world has never seen is coming. SECRET BANKING CABAL RUNS ECONOMY – Bloomberg News www.bloomberg.com NY TIMES A Secretive Banking Elite Rules Trading in Derivatives www.nytimes.com original article: The Coming Derivatives Crisis That Could Destroy The Entire Global Financial System theeconomiccollapseblog.com
Posted in Derivatives | Tags: Collapsing, Derivatives, Lindsey, Market, Morgan, Update, Urgent, Williams | 52 Comments »
Article by Nelly Naneva
After the collapse of Bretton Woods system in the early 1970s, the exchange rates of major currencies became floating, thus leaving the supply and demand to adjust foreign exchange rates in accordance to their perceived values. The increase in volatility of the exchange rates, together with the increase in the volume of world trade led to the escalation of foreign-exchange risk.
Currency risk is part of the operational and financial risk associated with the risks of adverse movements in the exchange rate of one particular currency against another. In comparison with investments in local assets, the freely fluctuating currency rates represent an additional risk factor for investors who want to diversify their portfolios internationally. Therefore, the control and management of the currency exchange rate risk is an integral part of business management with a view to improve the effectiveness of international investments.
One effective and generally accepted method for this type of risk management is the use of derivative financial instruments (derivatives) such as futures, forwards, options and swaps. Although derivatives are extremely diverse, by their legal nature all of them constitute a contract between the buyer and seller, concluded in present, while the performance will take place at some time in the future. The value of the derivative contract depends on the price movement of the base or “underlying” security.
1. Using Derivatives for Elimination of Uncertainty (Hedging)
Derivative financial instruments are widely used tools for management and protection against various types of risk and are an integral part of numerous innovative investment strategies. They make future risks negotiable, which leads to the removal of uncertainty through the exchange of market risks, known as hedging. Corporations and financial institutions, for example, are using derivatives to protect themselves against changes in the prices of raw materials, forex exchange rates, stocks, interest rates, etc. They serve as insurance against adverse movements in prices and as a reduction of price fluctuations, which in turn leads to more reliable forecasts, lower capital requirements and higher capital efficiency. These advantages are led to the extensive use of derivative financial instruments: according to ISDA over 94% of the largest companies in USA and Europe manage their risk exposures, through the usage of derivatives. In summary – an investor that has decided to hedge the risk will become a party to a derivative contract, which leads to the financial result, the exact opposite of the financial result generated by the risk. That is, when the value of the hedged asset falls, then the value of the derivative security must increase and vice versa.
2. Using Derivatives for Providing Protection with Minimal Initial Investment
In addition, derivatives provide protection against currency risks with minimal initial investment and consumption of capital at the exceptionally high adaptability of the contractual terms and conditions in relation to the specific needs of each contracting party. They also enable investors to trade future price expectations buying or selling derivative asset instead of the base security at a very low cost in comparison with the direct investment in the underlying asset. The total value of the transaction for the purchase of a derivative on the major currencies is about 80 per cent lower than that of the purchase of a portfolio of relevant basic currencies. If compared with the costs of exposure in less liquid assets such as real estate, the difference in costs between derivative and direct investment in the underlying asset is even significantly higher.
3. Using Derivatives as an Investment
Another way to use derivatives is as an investment. Derivatives are an alternative to investing directly in assets without purchasing the base security. They also allow investments in securities, which cannot be purchased directly. Examples include credit derivatives, which provide payment if the creditor cannot fulfill its bond obligations.
4. Using Derivatives for Speculative Purposes
Although most participants in the market are using derivatives to hedge risks, some of them frequently trade derivatives for the purpose of generating profit at favorable price movements and without any offset positions. Usually, investors open positions in derivative contracts to sell an asset, which in their opinion is overestimated in predetermined period or date in the future. This trading strategy is profitable if the value of underlying assets actually falls. Such trading strategies are extremely important for the efficient functioning of financial markets, thus reducing the risk of a significant understatement or overstatement of the underlying assets.The use of derivatives for risk management is nowadays widespread in developed economies and is considered to be a routine part of the business of financial institutions and companies. The derivative financial instruments serve mainly as insurance against adverse movements in prices and as a tool for reducing price fluctuations, which in turn leads to more reliable forecasts, lower capital requirements and higher productivity.
Furthermore the derivatives provide protection against currency exchange risk with minimal initial investment and consumption of capital at exceptionally high adaptability of the contractual terms and conditions meeting the requirements and needs of investors. They also enable market participants to trade future price expectations, this way purchasing a derivative financial asset instead of the base security at a very low cost in comparison with the total transaction if investing directly in the underlying asset.
About the Author
Nelly Naneva works as CEO of the Financial Institution Freetrade JSC, Sofia, Bulgaria and as Editor of the Online Financial Magazine Markets Weekly http://marketseekly.net.She holds Masters’ Degrees in Law from Sofia University St. Kliment Ohridski, Bulgaria and in Banking and FInance from Institute of Financial Services, School of Finance, London, Great Britain.
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whereby the original author’s information and copyright must be included.
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Article by Nelly Naneva
After the collapse of Bretton Woods system in the early 1970s, the exchange rates of major currencies became floating, thus leaving the supply and demand to adjust foreign exchange rates in accordance to their perceived values. The increase in volatility of the exchange rates, together with the increase in the volume of world trade led to the escalation of foreign-exchange risk.
Currency risk is part of the operational and financial risk associated with the risks of adverse movements in the exchange rate of one particular currency against another. In comparison with investments in local assets, the freely fluctuating currency rates represent an additional risk factor for investors who want to diversify their portfolios internationally. Therefore, the control and management of the currency exchange rate risk is an integral part of business management with a view to improve the effectiveness of international investments.
One effective and generally accepted method for this type of risk management is the use of derivative financial instruments (derivatives) such as futures, forwards, options and swaps. Although derivatives are extremely diverse, by their legal nature all of them constitute a contract between the buyer and seller, concluded in present, while the performance will take place at some time in the future. The value of the derivative contract depends on the price movement of the base or “underlying” security.
1. Using Derivatives for Elimination of Uncertainty (Hedging)
Derivative financial instruments are widely used tools for management and protection against various types of risk and are an integral part of numerous innovative investment strategies. They make future risks negotiable, which leads to the removal of uncertainty through the exchange of market risks, known as hedging. Corporations and financial institutions, for example, are using derivatives to protect themselves against changes in the prices of raw materials, forex exchange rates, stocks, interest rates, etc. They serve as insurance against adverse movements in prices and as a reduction of price fluctuations, which in turn leads to more reliable forecasts, lower capital requirements and higher capital efficiency. These advantages are led to the extensive use of derivative financial instruments: according to ISDA over 94% of the largest companies in USA and Europe manage their risk exposures, through the usage of derivatives.
In summary – an investor that has decided to hedge the risk will become a party to a derivative contract, which leads to the financial result, the exact opposite of the financial result generated by the risk. That is, when the value of the hedged asset falls, then the value of the derivative security must increase and vice versa.
2. Using Derivatives for Providing Protection with Minimal Initial Investment
In addition, derivatives provide protection against currency risks with minimal initial investment and consumption of capital at the exceptionally high adaptability of the contractual terms and conditions in relation to the specific needs of each contracting party. They also enable investors to trade future price expectations buying or selling derivative asset instead of the base security at a very low cost in comparison with the direct investment in the underlying asset. The total value of the transaction for the purchase of a derivative on the major currencies is about 80 per cent lower than that of the purchase of a portfolio of relevant basic currencies. If compared with the costs of exposure in less liquid assets such as real estate, the difference in costs between derivative and direct investment in the underlying asset is even significantly higher.
3. Using Derivatives as an Investment
Another way to use derivatives is as an investment. Derivatives are an alternative to investing directly in assets without purchasing the base security. They also allow investments in securities, which cannot be purchased directly. Examples include credit derivatives, which provide payment if the creditor cannot fulfill its bond obligations.
4. Using Derivatives for Speculative Purposes
Although most participants in the market are using derivatives to hedge risks, some of them frequently trade derivatives for the purpose of generating profit at favorable price movements and without any offset positions. Usually, investors open positions in derivative contracts to sell an asset, which in their opinion is overestimated in predetermined period or date in the future. This trading strategy is profitable if the value of underlying assets actually falls. Such trading strategies are extremely important for the efficient functioning of financial markets, thus reducing the risk of a significant understatement or overstatement of the underlying assets.
The use of derivatives for risk management is nowadays widespread in developed economies and is considered to be a routine part of the business of financial institutions and companies. The derivative financial instruments serve mainly as insurance against adverse movements in prices and as a tool for reducing price fluctuations, which in turn leads to more reliable forecasts, lower capital requirements and higher productivity.
Furthermore the derivatives provide protection against currency exchange risk with minimal initial investment and consumption of capital at exceptionally high adaptability of the contractual terms and conditions meeting the requirements and needs of investors. They also enable market participants to trade future price expectations, this way purchasing a derivative financial asset instead of the base security at a very low cost in comparison with the total transaction if investing directly in the underlying asset.
About the Author
Nelly Naneva works as CEO of the Financial Institution Freetrade JSC, Sofia, Bulgaria and as Editor of the Online Financial Magazine Markets Weekly http://marketseekly.net.She holds Masters’ Degrees in Law from Sofia University St. Kliment Ohridski, Bulgaria and in Banking and FInance from Institute of Financial Services, School of Finance, London, Great Britain.