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Banking Essentials - Part I
This pathway will walk us through the basics of banks, starting with some of the different types and their main functions, then starting to look at the regulation faced by the banks, both before and after the Global Financial Crisis.
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Greenwashing is the act of distributing false information about something being more environmentally friendly than it actually is.
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Tackling the Cost of Living Crisis
In this video, Max discusses the cost-of-living crisis currently enveloping the UK. He examines its impact on households as well as the overall economy.
CSR and Sustainability in Financial Services
In the first video of this two-part video series, Elisa introduces us to sustainability. She begins by looking at the difference between sustainability and corporate social responsibility, two terms that can be easily confused.
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Categories
Discover our Courses
Featured Pathways
More pathways
Banking Essentials - Part I
This pathway will walk us through the basics of banks, starting with some of the different types and their main functions, then starting to look at the regulation faced by the banks, both before and after the Global Financial Crisis.
Greenwashing
Greenwashing is the act of distributing false information about something being more environmentally friendly than it actually is.
More pathways
Ready to get started?
Plans & Membership
Find the right plan for you
Our Platform
Expert led content
+1,000 expert presented, on-demand video modules
Learning analytics
Keep track of learning progress with our comprehensive data
Interactive learning
Engage with our video hotspots and knowledge check-ins
Testing & certification
Gain CPD / CPE credits and professional certification
Managed learning
Build, scale and manage your organisation’s learning
Integrations
Connect Finance Unlocked to your current platform
Featured Content
More featured content
Tackling the Cost of Living Crisis
In this video, Max discusses the cost-of-living crisis currently enveloping the UK. He examines its impact on households as well as the overall economy.
CSR and Sustainability in Financial Services
In the first video of this two-part video series, Elisa introduces us to sustainability. She begins by looking at the difference between sustainability and corporate social responsibility, two terms that can be easily confused.
More featured content
Ready to get started?
Our Solutions
About Us
Testimonials
More testimonials
Mark Homans
Our sky high NPS following learner feedback speaks for itself - this platform has delivered a lot of value.
Fiona Quinn
Learning is accessible and the tool assists in the continued development of all our employees. It is a fantastic tool for our business!
More testimonials
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Introduction to Options Valuation
Lindsey Matthews
30 years: Risk management & derivatives trading
In this video, Lindsey explains how the simple valuation model is established and also talks us through how the model is used in practice
In this video, Lindsey explains how the simple valuation model is established and also talks us through how the model is used in practice
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Introduction to Options Valuation
10 mins 54 secs
How would we value an out-of-the-money option? The value from an OTM option comes from the volatility. If the underlying was not volatile, the option could never be in the money and would have zero value. We therefore need a model that translates volatility of the underlying into option value. In order to value options we need a distribution of the value of the underlying at expiration, with probabilities attached to various possible outcomes, let's see how this works.
Key learning objectives:
Outline the simple option valuation model
Understand how the model is used in practice
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How is the simple option valuation model established?
To value options, we need a distribution of the value of the underlying at expiration, with probabilities attached to various possible outcomes. The model allows for 5 possible values, with a symmetrical distribution around a central value, as outlined below.
The middle value should be equal to the forward price for the expiration we are looking at.
The width of the bars depends on the volatility of the underlying. The width of the bars is calculated as Annual volatility x √Time. Therefore if the forward was 1,000 and the 3-month volatility was 5%, the bar width would be 50.
Once the central value and the width of the bars have been established you can calculate the payoff at expiry, as shown here:
And once that has been calculated, you can then calculate the value at expiry (image is for reference only and refers to valuing a call option with a $950 strike price).
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Lindsey Matthews
09:04
06:10
12:17
11:24
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