Ses 11: Options II
HTML-код
- Опубликовано: 10 фев 2025
- MIT 15.401 Finance Theory I, Fall 2008
View the complete course: ocw.mit.edu/15-...
Instructor: Andrew Lo
License: Creative Commons BY-NC-SA
More information at ocw.mit.edu/terms
More courses at ocw.mit.edu
![I.N "HALLUCINATION" | [Stray Kids : SKZ-PLAYER]](http://i.ytimg.com/vi/n5B5q1Hwt_U/mqdefault.jpg)
Words can't describe the greatness of this professor. Great lecturer.
Wow, that's pretty high praise, I guess I'll listen then.
Prof has rare combination of intelligence n a bit of humour-
amazingly he also possesses skill n ability to simplify seemingly complex subject !!
No wonder why MIT is freaking good
All these new youtube option gurus out there need to watch & learn this series
Facts
I've zoomed through half this course in 4 days and already starting to get the feeling I am going to miss these when I have no more to go over.
Can you tell me some similar resourses?
Lies again? Samsung Ericsson
Back again for the 5th time going through all of these lessons
Ye, I will look up his name to find more
What an engaging presentation with intellect and fun in equal measure! The fun part helps anchor the rigorous points.
45:16 There is a general formula for the quartic equation. In fact, the Abel-Ruffini theorem says that there isn't a closed formula for higher orders.
And no one cares in the real world. You just use numerical methods to get the roots.
One of the greatest financial classes I’ve seen.
andrew lo is the man !!
45:26 Actually there is a formula for a 4th degree polynomial. There is, however, no formula for n >= 5 in general. To read more about that check Abel's impossibility theorem and Galois theory.
Does that help with predicting vix or commodity prices?
@@frv6610 No
excellent lecture. I wish all professors were like him.
Awesome
I really like this professor.
Great course and professor! Reading all Lo's books asap
Amazing lecturer and I absolutely love how you pronounce finance.
Thank you, it is so nice. I am a FX sales ,after listening your lesson, it makes more sense.
This professor is the best
This is the most sophisticated instrument for me to retake nimbly and regurgitate over and over again. Yes, this video is the most rudimentary but essential for me to jump into this unknown water that looks like either swamp, quicksand or the ocean. At least I got Prof Lo's safety vest and I can carefully to "test" the water....Hahaha, a good lecture in strict COVID isolation period in Down Under......STF.............
Reference to Abel-Ruffini!!! Can this course become any more interesting!!! Although he says that there are no formulas beyond cubic, actually there is formula for quartic equations. It is when you get to fifth order polynomials and beyond that there is no general formula.
45:06 Imagine a Math professor giving you a nerd award 😂
@17:30 that's not quite true. if you sell a covered call, your losses aren't unbounded. you only miss out on potential profit. for example i bought 100 shares of CPB stock at $45. then i sold a call at $47. the price went up to $49. my option got exercised and i had to sell my 100 shares at $47, so i made $200 in profit, when I could have made $400. sad day for me. but i still MADE money in the end. I didn't actually 'lose' the extra $200, i only missed out on potential gains. theoretically, losing $200 and not gaining $200 are the same thing, but in reality and in your bank account, that's VERY different. i wish he had focused more on the selling of options, since buying options is very risky business akin to gambling imho. but i understand that options trading is easier to understand from the buyer's perspective than the seller's.
This lecture is great, i had structuration courses, but this one is the best!
Juju
simsquad
Yes, we need to get some other materials by our own. Got A. Lo's point.
This looks like the ReLu activation function.
It looks like a hockey stick.
Great lecture. Is it possible to gain access to course 15437 Options and Features that he mentions in the beginning?
I was wondering the same thing.
On the MIT courseware but has no video lectures unfortunately
Let's write to MIT
Nope, you won’t see me next Wednesday. I’m just passing thru in RUclips in 03/2024.
Let me get some of that Xantac lol-This guy, wish I could have taken his course :D
Professor, [@time 13:13] isn't that the MAXIMUM payoff for put =20? Given Ex Price $20, maximum payoff from a PUT should therefore sensibly be Pt ~ max [ 0, K - So], when So=0.....?
Yes. Note slide 8 at 17:58
25:34 why is the payoff 0 when the price drops under 50. when we sell short, we get $60 and we need to cover our position so if the price drops to let's say $40. we don't need to execute the option but don't we need to buy the stock at $40 from the market and return the underlying security?
“Payoff” refers to the payoff at expiration
I could not understand that part completely. If the current price goes down to prices less than 50 then it will not be profitable for the buyer of call option. That's why it is zero
For the second part, there is 60. Individual may think that the range will be between 50-60. But there might be some people who believe the price will be much more, for instance 80 90. And they will be willing to buy this call option. So, after 60 dollars the graphics is also bounded.
Idk, if I understood in a right way 😶
I guess i catched it. In order to reduce the cost of call option at 50 dollars, individual shorts it at 60 and gives up the unlimited part(where he/she could get more profit)
I'm looking for a lecture from MIT about SELLING options. I would like to see more about seeking long theta. If the Brownian Motion explains the random walk of a stock and black-scholes is a decent approximation to value options, one should be able to SELL out of the money options during high Implied Volatility environments. We should be able to take this idea farther in terms of buying Calendar Spreads and managing Vega. Thoughts?
Seven years on may be too late but I recommend a book by Nasser Saber called "Speculative Capital & Derivatives Vol 2".
His idea is that options are not so much the right to buy or sell (which only apples to the holder) but are merely a forward contract where one side has the option to back out by pre-paying a statistical estimate of what they would have been likely to lose. He also talks about the movement of stock prices NOT being random, but being an in-built feature of the logic of a stock in the first place, this then leading to the reasoning of Black-Scholes, which couldn't work if prices were truly random..
Can somebody tell me who is the professor? Amazing
*A butterfly spread is aka Bernies worm.
Small correction: the professor states that "there are no more formulas beyond the cubic". However, there is in fact a quartic formula for solving general fourth-degree polynomials, and there are no more beyond that.
@13:25 he says the maximum upside of the put option is $10, but shouldn't this be $20? K - St = Max profit, 20 - 0 = 20?? What am I missing?
your right. its a small mistake, his x axis doesnt start from 0
@@Copepiece Thanks, I was wondering that also.
@@wcottee Me, too. And then I looked for a comment about it, and I wasn't disappointed.
Niccolò Fontana Tartaglia is his "colleague"
Excellent and extremely good
Andrew Lo is a bad man ! BABY YEA. he knows where to get good truffles and cain!party animal
long andrew lo
hello, can anyone tell me what is the term used when someone sells assets before a predicted market crash?
bear market??
@@vishalpoddar Panic selling?
Dumping?
@@andreasapei2859 I think mine is the right answer. But he didn't even bother to like it.
@@enisten probably yes, dumping is kinda used more when talking of market manipulation
This is so interesting
is there anything on the Greeks? Can't find it and my prof isn't the greatest at explaining or writing... :(
The are no formula's beyond the quartic. He doesn't know his Galois theory!
but why doesnt discuss about differences in premium price
How did kids in the lecture caould calculate the precise rate of volatility?........STF....
ReLU is bizzare structure?😁😁😁
45:23
actually there is a formula for quartics, but none beyond that.
en.wikipedia.org/wiki/Abel%E2%80%93Ruffini_theorem
I want to be in this class room
the best
CARDANO ADA
Xanax, not Zantac.
43:04 why are you smiling miss!
and that N I C E guy with red bull 52:55, probably my professor would had kicked me out of class
🇮🇳🇮🇳🙏🙏👍👍
Actually Einstein published the thesis in 1905
Akon with redbull
51:25
:(( omg a great profess
Useless just theory. No experience in battle. That's nothing.
So now when Ukraine-Russia war goes on, during this battle do you buy some commodities?
Get out of stocks now
It all makes sense now why Kanye's a Billionaire!
Niccolò Tartaglia
ruclips.net/video/rMsu4v-UlkA/видео.html
Such a poor job of explaining.