Sentences with phrase «volatility of the underlying asset»

A «restriction on benefits incentivising trading,» «a standardised risk warning,» and «leverage limits on the opening of a position between 30:1 and 5:1, whose limit will vary according to the volatility of the underlying asset» also featured among the proposals published in December.»

The expected future volatility of the underlying asset is one of the most important determinants of the option price.

If options writers were underpricing options in order to try to expand their activities, then implied volatility would be persistently below the subsequently realised volatility of the underlying assets over the life of the options.

I think the volatility of the underlying assets could be a huge hurdle, and re-education.

The spread between these two is generally fixed, and its size depends on the volatility of the underlying asset.

Second, the volatility of REITs generally (including ZRE) is related to the volatility of their underlying asset.

This type of investment is usually medium to long term (5 years or more), because of the potential for volatility of the underlying assets.

There is one other factor that can increase the odds that the event we want to happen will occur — if the volatility of the underlying asset increases.

The Black — Scholes formula has only one parameter that can not be directly observed in the market: the average future volatility of the underlying asset, though it can be found from the price of other options.

By relating option prices to observables (such as strike prices, time - to - expiration, spot price and so on) and one unknown parameter (implied volatility of the underlying asset return dynamics), Black and Scholes (1973) allowed practitioners to more systematically study observed option prices.

Not exact matches

The halts are «not surprising based on the volatility of the underlying [asset].

This, along with its volatility and a broad lack of understanding of the underlying technology, has caused traditional investors to shy away from this new asset class.

ESMA issued a call to submit evidence on potential interventions in crypto CFD, arguing that the very high price volatility of crypto currencies as the underlying assets have raised concerns about the protection of investors.

Invests in shares of an underlying fund, AFIS Asset Allocation Fund, while seeking to manage portfolio volatility and provide downside protection, primarily through the use of exchange - traded futures.

In particular, futures and forwards provide information about the expected future price and options provide information about the volatility and risk associated with the price of the underlying asset.

Liquidity providers in option markets prefer to hedge mostly with other options, hedging residual greeks with other assets such as the underlying, volatility, time, interest rates, etc because trading costs are lower since the two offsetting options hedge most of each other out, requiring less trading in the other assets.

What if» scenarios - Change implied volatility, days to expiry or the underlying asset price of an option to model it in thousands of potential scenarios.

If you are more risk averse, and your portfolio is more heavily weighted towards U.S. - based investments, has lower currency volatility, or low correlation between the currency and the underlying asset return, you may consider having a lower proportion of currency hedged investments.

Secondly, the VIX is designed as a theoretical price, not an asset - this is advantageous in that it is quoted in units of the underlying asset, but volatility is much more expensive and difficult to hedge than variance.

It can go up or down depending on changes in the underlying asset, time to expiration and levels of volatility.

Market makers adjust for such skewness by, instead of using a single standard deviation for the underlying asset σ -LCB- \ displaystyle \ sigma -RCB- across all strikes, incorporating a variable one σ (K)-LCB- \ displaystyle \ sigma (K)-RCB- where volatility depends on strike price, thus incorporating the volatility skew into account.

Mortgage securities and collateralized mortgage obligations (CMOs) are subject to prepayment risk and the risk of default on the underlying mortgages or other assets; such derivatives may increase volatility.

Warning that the use of bitcoins as an investment tool is limited because there is no underlying asset and the virtual currency is subject to high volatility, the central bank said speculators are at risk, as they would have no legal recourse if there is a loss of confidence in the cryptocurrency or if they are victims of theft from hackers.

The platform has also integrated Coinapult's LOCKS tool to tie the value of cryptocurrency to another asset, thereby protecting its underlying value from price volatility.

Trading of derivatives like futures also serves to move volatility away from the underlying asset and ultimately causes prices to become more predictable overall.

Tom Lehrkinder, a senior analyst working at the consulting firm Tabb Group pointed out that these halts are «not surprising based on the volatility of the underlying [asset].