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 Stability Warrants Trading for Newbies
Issued on December 20 2010 par Strategies Options
Get started in stability warrants trading
Stability warrants are of the easiest financial products to understand. They are pure bets on a range that won't be hit by a particular underlying. They are issued by banks in order to provide a way to earn a fixed amount.
I - Example We assume one is able to pay $ 3 for a stability warrant which would be payoff $ 10 if an particular underlying doesn't hit neither an up barrier nor a down barrier until its expiry. It's a double barrier bet. If one of both barriers is touched during the life of the stability warrant, the bet is lost. II - The binary feature The payoff of a stability warrant can only take one of the two possible states. - Either it's a success - Or it's a failure There is no other possible choice. III - Graph A stability warrant 90-110 payoff $ 10  Next : Stability Warrants : A First Attempt Previous : Turbo Warrant : Volatility Sensitivity Other Derivatives - INDEX Other Derivatives - CHAPTER I Other Derivatives - CHAPTER II Other Derivatives - CHAPTER III Other Derivatives - CHAPTER IV Strategies Options |
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