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Finance dairy

By Michelle Turner,2014-02-07 05:49
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Finance dairy

    liquidity crunch lead to the price down of the gold and silver???

    US AND WORLD

    All eyes still on Europe, American September retail sales ,October consumer sentiment, Chinese data.

    Companys: Google, Alcoa, J.P. Morgan, U.K. luxury-goods firm Burberry and French retailer Carrefour are expected to release trading updates next week.

    CHINA

    MORTAGE problem s in small corporates which is uncovered by the escape of proprietor in Wenzhou

2011/10/9

    Buy a basket of blue chip stocks (maybe technology stocks)an then short a certain size index (NASDAQ).

    How to determine the correlation between this two securities??? What is the method of hedging and arbitrage ???

    Once you buy a option, only the factor, stock price, volatility, risk-free interest rate.

    When risk free rate increase, seller require more profit,therefore,the investors who hold long position on call option should pay more, investor holding put option pay less.

    Besides, the present value of any future cash flow decrease when the risk free interest rate increase.

    However, increase in the risk free rate lead to the fall of the stocks .(more cost when buying money, the cash in market to invest decrease, company value when being discount now decrease, stock market with more risk less attractive, inflation )

    Call option holder is a person who want to buy now but do it in the future. So he hold the cash which is belong to the buyer.

    Put option holder is a person who want to sell now but do it in the future.So he do not hold the cash now which is belong to him.

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