Second Round Technical Interview

So I made it through the first round of probability qs, and basic personal qs about why trading. Now I've got a more difficult one. It's a phone interview and it will focus on advanced concepts in derivatives pricing in trading. How should I prep? Have the BSM model down pat? I'm just not sure what to expect

2 Comments
 

My guess (based on my current classes in derivatives) is that they will ask you how the change in one variable (such as spot price or time period) will affect the price of a derivative.

For example, how does increasing the time period of a put or call affect the price of the derivative?

A: It will increase the price of the derivative as there is more time for the option to become in the money, or something to that extent.

"The power of accurate observation is commonly called cynicism by those who have not got it." - George Bernard Shaw
 
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