in options trading, margin must be posted by______

Q: How to figure out price targets for stocks by charting

A: One of the most typical ways to create a target price is to first identify a technical chart…

Q: Discuss the payoff structures for call and put options and the determinants of call and put option…

A: Since you have asked multiple question, we will solve the first question for you. If you want to any…

Q: In the Black-Scholes option pricing model, the value of a call is inversely related to: a. the…

A: Time to expiration denotes the time period between the formation of derivative contract and the…

Q: Market li

A: Bid price means the highest price the buyer is willing to pay and ask price is the lowest price the…

Q: What does the meaning of maximum and minimum price in the stock performance graph? how to know which…

A: Succinctly summarized, a stock chart is a graph that illustrates the price of a stock over a certain…

Q: Discuss similarities and differences between seasoned offerings and right issues for stocks.

A: Firm issues various securities to arrange the funds for the firm’s requirements. Stock or common…

Q: What impact does each of the followingparameters have on the value of a call option?(1) Current…

A: Call option: Call options are financial agreements that give the holder of option the right, but not…

Q: Explain with examples of how an option holder gains or losses from an increase in the volatility of…

A: Option buyer buys a right to exercise buy or sell, at the time of their benefit, at a pre-defined…

Q: what is the best type of chart to represent the variable Tesco Stock Price?

A: The stock price movements can represent with the help of different chart patterns. The different…

Q: Describe the five variables (Assets price, Strick price or Exercise Price, Risk- Free- Rate, Time to…

A: Five Variable of Black-Scholes Merton Formula   Assets Price Strike Price or Exercise Price Risk…

Q: What impact does each of the followingparameters have on the value of a call option?(5) Variability…

A: A call option provides certain rights to an individual regarding purchasing any stock at a strike…

Q: Briefly explain the following 1. Spot market vs futures market

A: There are two market spot market and future markets.

Q: Explain why common stock is itself like a call option. What plays the role of the exercise price and…

A: There are two types of options in the market: call options and put options.  Call options allow the…

Q: Explain how the following parameters are used for analyzing a stock (or portfolio). Include in your…

A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

Q: How to use call options and put options to create a synthetic short position in stock?

A: An options are actually touted as one of common method for the profit from the swings of the market.…

Q: Explain required rate of return on stock

A: The required rate of return is the minimum acceptable rate of return that an investor expects to…

Q: Show graphically and explain the profits and losses of buying futures relative to buying call…

A: If an investor buys Future contract or Call Option Suppose the investor buys a call option at…

Q: Carefully compare and discuss the concept of margins in forwards/futures markets and options…

A: Margin is the amount that is deposited as a security in the derivative contracts.

Q: Calculate the expected return for Stock A.

A: Expected Return: It represents the profit or loss expected by an investor on an investment. It is…

Q: Describe the effect of a change in each of the following factors on the value of a calloption:1.…

A: Call option is the derivative financial instrument that gives an investor the right to buy in future…

Q: what is the terminology for the lowest price listed on a stock market exchange at which an investor…

A: Stock price represents the worth of the stock. The market price, buyer price, ask price, and bid…

Q: This is is the question related to the course "Financial Derivatives and Risk Management" Why are…

A: Option Pricing Models: There are two main models that are used to value options. They are: The…

Q: what are the advantages and disadvantages of covered call and protective put which are options…

A: Due to uncertain factors, security prices fluctuate regularly which creates risk for the investors.…

Q: Which of the following techniques is used to value stock options?   a. Black-Scholes method b.…

A: black scholes method is used to value options

Q: What effect does Standard Deviation of Stock returns have on call option price?

A: Standard Deviation of Stock Returns:The standard deviation of stock returns represent how much…

Q: Why are the probabilities of stock price movements not used in the binomial model for calculating an…

A: The binomial option pricing framework was established in 1979 as a technique for valuing options.…

Q: Which exchange’slisted stocks have the greatest market value?

A: A stock exchange is a centralized venue for buying and selling stocks of publicly traded firms.

Q: Briefly explain the mechanics of adjustable rate and market auctionpreferred stock.

A: Return rate can be categorized as fixed and variable rate. In fixed rate return investor get fixed…

Q: Explain how and why an increase in each of the following affects the prices of both call and put…

A: The option is a financial instrument based on the value of underlying securities such as stocks and…

Q: Describe the effect of a change in each of the following factorson the value of a call option: (1)…

A: An agreement where the holder has a right to purchase or sell the shares at a specific price at a…

Q: Why do call options with exercise prices greater than the price of the underlying stock sell for…

A: To understand this statement, we consider a practical example Let stock have current price…

Q: Throughout this course we have discussed market entry strategies, i) trading entry strategies, and…

A: Market entry is the strategy made by traders and investors to enter the market to earn profits and…

Q: What are the Black-Scholes Options Pricing Model's underlying assumptions?

A: The Black-Scholes Options Pricing Model can be defined as the pricing model used to ascertain the…

Q: What effect does Stock Price have on call option price?

A: Call options are contract which gives the buyer the right but not the obligation to buy the…

Q: What are the steps in valuing a call option when the binomial tree describing an underlying stock…

A: The valuation of a call option can be done with the help of two models such as Black-Scholes model…

Q: How can the model be used to estimate the predicted return ona stock?

A: Predicted rate of return: Predicting a rate of return is the method of calculating future rate of…

Q: Briefly describe the use of stock options in acompensation plan. What are some potential problems…

A: A stock option is basically a contract between a buyer and a seller, wherein the buyer has the right…

Q: In Shiller’s terminology, what are ex post stock prices?

A: The intrinsic value of the stock could be higher or lower. The stock investor's purpose is to find…

Q: hort Term Trading Strategy for market portfolio

A: Trading for market portfolios can be short term trading strategy and long term trading strategy. The…

Q: Stock X has the following data. Assuming the stock market is efficient and the stock is in…

A: The Constant Growth Model was developed by Gordon. This method assumes that a company grows at a…

Q: Both call and put options are affected by the following five factors: the exercise price, the…

A: Put Option:- It is an financial instrument that gives right to sell but not the obligation to sell…