Options, Futures and Other Derivatives Ch2 Questions Part 2

[@hyo-junkim9225]

You are really good Mr. Meldrum. thanks!!! It was really helpful to solve my conundrum!!!

[@Eskor.e]

Hi Mark, thanks for these videos they're incredible. Quick question: I got a bit confused when you said @ the 3:45 mark 'we deliver the Yen to the short position'. Does that mean you closed the long position and rolled into a short one? Why do we assume that, I thought we were holding both contracts open to the delivery date.

[@MarkMeldrum]

This is called offsetting. When you are long one contract and then short the same contract at a later date - you are deemed to have closed your position.

[@Eskor.e]

Thank you, is it the same for options?

[@MarkMeldrum]

As long at the option, the strike and the expiration are all the same.

[@HoelzleAdriano]

Hi Mark, I hope you are well. A quick one in regards to the example questions 2.28 According to Hull's answers book, the answer to that question would be that we need to add $36,000 to our account as I believe we are only considering the margin that we need to add for the 20 newly added contracts. The answer presented is; "The clearing house member is required to provide 20x $2000 = $40,000 as Initial Margin for the new contracts. There is a gain of (50,200 - 50,000) x 100 = $20,000 on the existing contracts. There is also a loss of (51,000 - 50,200) x 20 = $16,000 on the new contracts. The member must therefore add 40,000 - 20,000 + 16,000 = 36,000" Is there a mistake on the Answer book? Thanks a lot

[@MarkMeldrum]

Ummm....the 2.28 question I have presented pertains to OJ futures. The numbers you have above have nothing to do with 2.28. Perhaps you are using a different version of the book that has different questions?

[@HoelzleAdriano]

Question 2.15 The playlist changed when I was writing to you, hence why the confusion in the question. But it is the exact same one. Thanks for getting back to me so fast

[@LS-cs9rq]

Hi, Mark I've noticed that the playlist section of your youtube channel is now empty. I used to use that section to study but now I don't know where to find them again. Could you please kindly help? Many thanks, Long

[@MarkMeldrum]

kzbin.info/www/bejne/fZvXaXiDibqpd8k Plus read the comments

[@Daj17399]

Hi Mark, This Question 2.16 is not the correct one. That question you are doing is in fact from chapter 1, question 1.24.

[@Daj17399]

Even Question 2.28 is actually Question 2.29 in the 9th Edition ...which got me thinking... checking the 8th edition textbook I confirmed that you are using the 8th edition, not the 9th.