CFA Level I Derivatives - Derivative Pricing and Replication

[@KAKA-ep3fg]

It's so easy to understand. it helps me a lot. Thank you for your great explanation.

[@mazharcoban]

you have to pay a premium to short a forward contract therefore there must be cash outflow at t=0.

[@mekhathomas4050]

Only put and call options need premiums, not forwards.

[@shadrinan90]

Interesting, short and clear!

[@amznprime5145]

7:01 Shouldn't it be the investor agrees to buy, not sell, the stock at $103 one year later? 😂

[@rafarevam]

Thank God. I thought I was the only one.

[@rafarevam]

Also. Shouldn't he be shorting the forward and buying the underlying It should be a short forward position combined with a buying the underlying Like he himself said in the beginning of the video

[@gozy2932]

Wow, too good

[@youtubeuser2195]

Nice graphics

[@geinezhang7030]

really good content

[@bushrajarba]

simple and clear. thank you !!!!

[@PrepNuggets]

You're welcome!

[@rishabmitra1081]

best explanation ....

[@x6011]

short forward at t=0, just meaning the positin, not meaning really 'selling forward', correct? the selling forward only happens at t=T? thanks!

[@besszhang2864]

Yup! Even though this reply is a little bit late, I hope it can still be useful: for forwards/futures, you just entre the contract with no upfront payment, and signing the contract means that you have the OBLIGATION of selling/buying the underlying asset at maturity. However, for options, you do have to pay for the price of it, and it is not a contract, you have the RIGHT BUT NOT OBLIGATION to buy/sell the underlying asset at maturity.

[@ankitamarkan8457]

Very helpful!!

[@Jupiter1423]

What always got me about this is that its all based on the risk free rate. But who can actually borrow at the risk free rate?

[@mustafael-dardeery4804]

well, If you bought t bills you pretty much borrowed at the risk free rate

[@Jupiter1423]

@@mustafael-dardeery4804 you lend when u buy t bills...not borrow

[@cbah4656]

i wish i can give a hundred likes👌

[@sudhanshupandey2207]

Nicely explained