Innovative Derivatives: The World of Exotic Options
In-depth exploration of various Exotic Options, shedding light on their benefits, limitations, and the intricate methods employed for pricing!
Diversifying with Options: A Tactical Guide to Trading Strategies Part 1
A comprehensive post on various option strategies, and their applications in risk management, income generation, speculation, and flexibility. We delved into detailed payoff graphs, exploring max profit, loss, and breakeven points.
Options Strategies With Python – Part 1
Covered Call import numpy as np import matplotlib.pyplot as plt # Function to calculate the payoff of a covered call def covered_call_payoff(s, strike_price, stock_purchase_price, call_premium): # Stock payoff without the…
Exploring Implied Volatility in Depth
Introduction & Definition Implied Volatility (IV) serves as a crucial indicator in the realm of options trading, encapsulating the market's perception of potential future fluctuations in an asset's price. This…
Exploring Greeks – Vega (ν) and RHO (ρ) with Python
Option Price with Volatility import numpy as np import matplotlib.pyplot as plt from scipy.stats import norm # Function to calculate Black-Scholes option price for call and put options def calculate_option_price(S,…
Exploring Greeks – Gamma (Γ) and Theta (Θ) with Python
Relationship of Gamma (Γ) with different expiries import numpy as np import matplotlib.pyplot as plt from tabulate import tabulate from scipy.stats import norm # Function to calculate call gamma def…
Exploring Greeks – Delta (Δ) with Python
Delta vs Stock Price import numpy as np import pandas as pd import matplotlib.pyplot as plt from scipy.stats import norm # Black-Scholes model for calculating option price and delta def…
Comprehensive Guide to Option Greeks: Insights and Applications
In mathematical finance, the Greeks serve as essential measures denoting the sensitivities or derivatives of a derivative instrument's price—like an option—to alterations in one or more underlying parameters. These parameters…
Implied Volatility: Newton-Raphson and Bisection Method
Newton-Raphson Method import numpy as np import matplotlib.pyplot as plt from scipy.stats import norm import math def bsm_option_price(S, K, T, r, sigma, option_type='call'): d1 = (math.log(S / K) + (r…