Thank you very much!

Thank you Mr. Bhatnagar!

Hello Aastha, 2% gives the scheduled principal + prepayments of the outstanding balance

Thank you for the reply! Just to understand more if I would have not sold the June TBA on 12th and would have kept till 30th of month I would have made 2%(for 19 days). Is it correct?

Hello, we do not have to calculate the stock price at maturity. We enter the strategy today at current market prices. The idea is to lock-in an arbitrage profit today based on the mispricing of securities today. We do not need to worry about what the stock price may be at maturity.

@@finquestinstitute9996 oh okk thanks a lot I was having a bad with Confusing regarding this Issue…thanks a lot for helping me out

Thank you Alok!

Hello, hope you are doing well. We calculate credit exposures for positions in the trading book. These exposures are monitored against the limits framework approved for the respective counterparty by the bank's management. This helps us measure counterparty credit risk. Further, for positions in the banking book, we do keep a track of quantities for example like portfolio duration which gets driven by market factors. So that way do monitor market risk that the banking book positions get exposed to. Hope that answers the query!

@@south_mountain hi, there is a CVA capital charge calculated under the market risk framework of Basel III to account for credit transition risk of counterparties for positions in the trading book. For banking book positions (say loan/overdraft etc.) there is no separate market risk charge computed if I recollect correctly as per Basel III guideline.

@@finquestinstitute9996 Thank you so much for the explanation.

Hi, more frequently used approach is the residual days/360 OR residual days/365 (i.e. calendar days approach). However, there could also be a viewpoint that since trading activity impacting the option price will not happen on holidays/non-business days it would be appropriate to use a 252 day year (i.e. business days approach), in which case residual days/252 could be used.

@@finquestinstitute9996 i tried both and when it is 4/365, the price is more accurate in comparison to real data, while 4/252 usually shows much higher prices

@@farxoddonayev1000 I think it would be better to stick to the day count convention that the broader market is using which I believe is mostly residual days/ 360 or 365. Because finally the pricing that the model does should be acceptable to the market participants.

thank you! Glad to know the video was useful.

Hi George, I am not aware of a ready tool that may be available. But one may build an arbitrage trading algorithm for spotting put call parity opportunities. Ideally it would be good to have a fully automated trading algorithm for this due to the fact that such opportunities vanish quickly, so it's best to have a machine trade for us

@@finquestinstitute9996 thanks for the feedback. Yes, totally agree, ideally automatic searching for an opportunity and if possible to close the deal, although a higher risk for a configuratione error. I was not able to find neither a tool, nor a bot that deals with scanning for the opportunities, what is really surprising. Probaby not impossible to achieve for finance software programmers. I suppose institutions must have something like that. Please let me know if you find one.

Hello. Excellent class. Have you found any ready-made algorithm for this purpose? If not, I can develop it if I have the information about the options in an API or MetaTrader platform. I developed something in "almost" real-time that is running on a website, and this function would be a happy addition.

Thank you so much !. Happy to know the video was useful !

Hello, bids will be submitted by interested parties (they will submit their respective bid prices and the number of shares they wish to buy at that bid price). However, the actual allocation will happen at the lowest bid price that will result in the complete allocation of the number of shares being offered by the company. The parties posting higher bid prices will receive first priority in the share allocation (however, as mentioned earlier, the price at which the shares will be offered to all will be equal to the lowest bid price submitted that resulted in complete a share allocation)

@@finquestinstitute9996 in that case shouldn't the price of shares be 29.5? is it 30 because all shares were sold by that price?

Thank you Sachin for the feedback. Yes these are very useful concepts from credit risk perspective. I will try to put together a video on this!. Thank you.

Thank you Sachin. Happy to know the video was useful !

Thank you for your feedback Jake. Happy to know the video was useful for you. I agree the topic is technical, and may be a bit difficult to grasp for someone not familiar with capital markets. As you rightly pointed out, I tried to make the idea easier to understand through a working example.

It's totally fine.. Just focus on the explanation. Being in reits or not is irrelevant....

Hi Piyush, we will post a video on these important bond risk measures in the coming days. Thank you.

Thank you samie !. Glad to know the video was useful.

Thank you so much!