Tag Archive: Options


All valuation classes teach the equity market correlation method so it would be interesting to hear your views. Equity exists in many forms. In imagessecuritization, equity is the tranche that takes the first loss and controls the deal. In a mutual insurer/bank/thrift, etc., the book equity is held by the dividend-receiving policyholders. The real equity is held by management, who actually control the place, because the dividend-receiving policyholders will not vote them out. In a credit tenant lease, there is the guy that owns the property, and typically he puts up a teensy amount of equity, because there is a “credit tenant,” one that has an investment grade rating, and the mortgage is secured by:

  • the property
  • the senior unsecured credit of the “credit tenant,” whose lease payments pay the mortgage, and go directly to the lender, and
  • the equity owner.  Continue reading

Asset Pricing

Lets revisit an article I published a couple of months back  as we know all valuation classes teach the equity market correlation method soimages it would be interesting to hear your views.

Equity exists in many forms. In securitization, equity is the tranche that takes the first loss and controls the deal. In a mutual insurer/bank/thrift, etc., the book equity is held by the dividend-receiving policyholders. The real equity is held by management, who actually control the place, because the dividend-receiving policyholders will not vote them out. In a credit tenant lease, there is the guy that owns the property, and typically he puts up a teensy amount of equity, because there is a “credit tenant,” one that has an investment grade rating, and the mortgage is secured by:

the property
the senior unsecured credit of the “credit tenant,” whose lease payments pay the mortgage, and go directly to the lender, and
the equity owner. Continue reading

binary options

Binary options are investment products taking the Internet by storm. If you are looking for ways to make money online or for new financial products, then you probably saw advertisements for binaries, including from adsense as they pop up everywhere. But what are exactly these binary options and are there for anyone?

To put it simply, binary options are equivalent to taking tailor-made bets on financial markets. Or not to sound too much like gamblers, let’s say they let you make predictions about future prices. Do you think gold will go up today? Then buy a one day call binary option on gold. If you are correct you can make a 70 to 85% profit. But if you are incorrect, and this is a big ‘but’ you will lose 100% of your option. Continue reading

Theory of Asset Pricing

All valuation classes teach the equity market correlation method so it would be interesting to hear your views.images

Equity exists in many forms. In securitization, equity is the tranche that takes the first loss and controls the deal. In a mutual insurer/bank/thrift, etc., the book equity is held by the dividend-receiving policyholders. The real equity is held by management, who actually control the place, because the dividend-receiving policyholders will not vote them out. In a credit tenant lease, there is the guy that owns the property, and typically he puts up a teensy amount of equity, because there is a “credit tenant,” one that has an investment grade rating, and the mortgage is secured by: Continue reading

imagesHave you ever thought of purchasing or selling anything which give you both-ways profit?

I know you guys are confused what we actually are talking about but yes, in finance, there is an instrument which gives liberty to the owner to make profit irrespective of the any movement in the current market price and this magic stick is called as “STRADDLE”.

Swaption Straddle is actually a combination of the payer & receiver swaptions. It allows its owner to profit based on how much the price of the underlying security moves, regardless of the direction of price movement.  A straddle is an option trading strategy that involves buying a put and a call at the same strike price. If the underlying goes up, the call is profitable. If it goes down the put is profitable. If there’s little price movement the premiums likely constitute a loss.

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