Thank you Matt. In regard to the frequency of observation, imagine a single month with 20 trading days and the following sequence: (Mon:) 50 , 51, 52, 53, (Fri:)54, 55, 56, 54, 52, (Fri:)50, 48, 46, 44, 42, (Fri:)40, 38, 36, , 39, 42, (Fri:)45. If the observation frequency is only once per week (i.e., every Friday), then the maximum of this path is 54 and the minimum is 40. But if the frequency is daily, the max is 56 and the min is 36. The floating lookup call/put pays more under daily frequency. In fact, at any higher frequency, the payoff must be greater than (or equal to).Thanks,
Would I be correct in saying the premium is per contract which still contains a multiplier for the # of shares i.e. you'd pay $14.79 to Long the Lookback Call Option with a payoff of $7.19 x Contract multiplier.
Good express class, Greets from Lima , Peru
These videos are great. Thank you for the analysis. Was somewhat confused about the ‘frequency of observation’ comment though.
Thank you Matt. In regard to the frequency of observation, imagine a single month with 20 trading days and the following sequence: (Mon:) 50
, 51, 52, 53, (Fri:)54, 55, 56, 54, 52, (Fri:)50, 48, 46, 44, 42, (Fri:)40, 38, 36, , 39, 42, (Fri:)45. If the observation frequency is only once per week (i.e., every Friday), then the maximum of this path is 54 and the minimum is 40. But if the frequency is daily, the max is 56 and the min is 36. The floating lookup call/put pays more under daily frequency. In fact, at any higher frequency, the payoff must be greater than (or equal to).Thanks,
Thank you for your tutorials, good sir
Where can I trade exotic options?
Thanks
thank you
awww, thank you for thanking us!
Would I be correct in saying the premium is per contract which still contains a multiplier for the # of shares
i.e. you'd pay $14.79 to Long the Lookback Call Option with a payoff of $7.19 x Contract multiplier.
Can you please put a link for the xls file?
Yes I can, see description