I just joined a HF as an investment analyst (equities) and doesn't work on the trading side. My boss gave this order to our broker for an options trade and asked me to think about several follow up questions over the weekend (supposedly to broaden my skill-set beyond research). I haven't taken an options class and would really appreciate your help. The order he gave was:
XYZ 29Apr10 6.5 AC 6.26 Ref. Delta=25%, Price= 0.07/, Vol= 14.25%/
Suppose XYZ above is the ticker.
His questions were:
- What does the above order mean?
- Calculate the put-call parity
- Determine the price of call when stock is $6.30
- Verify that 0.07 is actually 14.25% volatility
- calculate price of option if it is based on 15% volatility
He then asked me to think about a different situation: we are working on a merger arb trade in Asia which has a "market out" condition (i.e. if, say, the Hang Seng index drops by 20% from the 21,000 level for 3 consecutive days, the acquirer can terminate the transaction without costs). He then asks me to think about how to hedge against this risk. I told him that we need to buy a put on the index. Note that this index is traded over the counter and not on an exchange. he then asked me to calculate how much to hedge, at what strike price I would hedge it at.
I would really appreciate your help...it will save my weekend :)
you're working for a hedge fund and asking random people on wso to do your hw/research report? something doesn't add up.
Dude, do your own homework.
.
You posted this yesterday and people told you to do your own homework. So why don't you please stop being a lazy piece of shit.
Actually, the dude posted the same thing on both forums at the same time.
Btw, you do realize how embarrassing it would be if your boss sees this. At the very least rephrase your post to sound like you're curious and not just being lazy.
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