Modeling Advanced Options Strategies
Cogito, ergo sum.
—René Descartes, Principia Philosophiae
This chapter shows how financial engineers combine various contracts to produce unique and useful profit patterns. Previous chapters were primarily concerned with a singular contract, which you learned how to model with the help of specific business rules. This chapter explains the profit patterns and mechanics of compound contracts and demonstrates the ways they can be modeled. The discussion begins with a simple strategy involving one stock and one option.
A Simple Strategy Involving One Stock and One Option
Chapter 6 acquainted you with the ...
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