http://www.options-trading-education.com/24091/interest-rate-options/
Interest Rate Options
In interest rate options trading traders are positioning themselves for a faster than previously expected rise in interest rates. As reported in Bloomberg, a faster rate rise is expected as evidenced by a change of the put to call ratio on interest rates from 1.9 to 3.2.
Options Wager
Investors in put options are betting that market participants will raise their expectations for the level of the federal funds rate in 2017. They are wagering that Fed policy makers meeting this week will forecast a higher rate at the end of 2017 than most investors now predict.
As of Sept. 10, there were 3.2 active put options for every active call option, according to data from CME Group Inc. That’s up from a ratio of 1.9 on the final day of the FOMC’s July 29-30 gathering.
Using short-term options on the contract allows traders to place a bet on a policy surprise from the Fed at a relatively low cost and limits the damage in case the trade doesn’t work out, because holders of the options can only lose as much as they paid for them.
The Federal Reserve is phasing out its quantitative easing stimulus program. The $85 billion a month purchase of bonds has been reduced and the general consensus is that it will be done by the next month. Federal Reserve officials have stated that they will keep interest rates low as long as it takes for the economic recovery to be secure. But, as employment figures rise speculation is that the Fed will push rates up soon rather than later. Interest rates options are a practical way to profit from such a move.
Interest Rate Options
An Interest rate option is a specific financial derivative contract. Its value is based is based on interest rates such as the yield on 10 year treasury notes. Just like with equity options one can purchase calls or puts. Traders purchases calls if they believe that rates will go up and puts if they believe that rates will fall. A useful reference is the CME Group Options Open Interest Rate Tool. Rate curves displayed include the following:
Eurodollar
1 Year Mid Curve
2 Year Mid Curve
3 Year Mid Curve
4 Year Mid Curve
5 Year Mid Curve
2 Year Note
5 Year Note
T bond
Ultra
As will all options trading it is smart to focus on one aspect of the market with which you are familiar in trading interest rate options.
Profitable Interest Rate Trading
There are many profitable options strategies that can be applied to interest rate options trading as well as trading other kinds of options. Basically interest rate options trading has to do with forecasting what the Federal Reserve will do with rates and other basic economic factors that tend to drive rates up and down. Short term interest rate options trading has to do with reading market sentiment using technical analysis tools in order to profit from the inefficiency inherent in all markets.
STOCKS, SHARES, EQUITY SHARES, PREFERENCE SHARES, BONDS, DEBENTURES, STOCK VALUATION, FEATURES OF COMMON STOCK, DETERMINING COMMON STOCK VALUES, EFFECTIVE MARKETS, etc.
http://www.options-trading-education.com/24091/interest-rate-options/
Interest Rate Options
In interest rate options trading traders are positioning themselves for a faster than previously expected rise in interest rates. As reported in Bloomberg, a faster rate rise is expected as evidenced by a change of the put to call ratio on interest rates from 1.9 to 3.2.
Options Wager
Investors in put options are betting that market participants will raise their expectations for the level of the federal funds rate in 2017. They are wagering that Fed policy makers meeting this week will forecast a higher rate at the end of 2017 than most investors now predict.
As of Sept. 10, there were 3.2 active put options for every active call option, according to data from CME Group Inc. That’s up from a ratio of 1.9 on the final day of the FOMC’s July 29-30 gathering.
Using short-term options on the contract allows traders to place a bet on a policy surprise from the Fed at a relatively low cost and limits the damage in case the trade doesn’t work out, because holders of the options can only lose as much as they paid for them.
The Federal Reserve is phasing out its quantitative easing stimulus program. The $85 billion a month purchase of bonds has been reduced and the general consensus is that it will be done by the next month. Federal Reserve officials have stated that they will keep interest rates low as long as it takes for the economic recovery to be secure. But, as employment figures rise speculation is that the Fed will push rates up soon rather than later. Interest rates options are a practical way to profit from such a move.
Interest Rate Options
An Interest rate option is a specific financial derivative contract. Its value is based is based on interest rates such as the yield on 10 year treasury notes. Just like with equity options one can purchase calls or puts. Traders purchases calls if they believe that rates will go up and puts if they believe that rates will fall. A useful reference is the CME Group Options Open Interest Rate Tool. Rate curves displayed include the following:
Eurodollar
1 Year Mid Curve
2 Year Mid Curve
3 Year Mid Curve
4 Year Mid Curve
5 Year Mid Curve
2 Year Note
5 Year Note
T bond
Ultra
As will all options trading it is smart to focus on one aspect of the market with which you are familiar in trading interest rate options.
Profitable Interest Rate Trading
There are many profitable options strategies that can be applied to interest rate options trading as well as trading other kinds of options. Basically interest rate options trading has to do with forecasting what the Federal Reserve will do with rates and other basic economic factors that tend to drive rates up and down. Short term interest rate options trading has to do with reading market sentiment using technical analysis tools in order to profit from the inefficiency inherent in all markets.
STOCKS, SHARES, EQUITY SHARES, PREFERENCE SHARES, BONDS, DEBENTURES, STOCK VALUATION, FEATURES OF COMMON STOCK, DETERMINING COMMON STOCK VALUES, EFFECTIVE MARKETS, etc.
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This event was India’s first ever integrated financial service providers’ exhibition that brought together top mutual funds, insurance companies, leading brokers, banks or financial institutions, fund managers, decision makers along with thousands of retail financial market participants, distributors, investors and vendors.
In this workshop Mr Sameer Kumar has explained how latest technology has changed trading environment and how you can increase your profits by taking advantage of it. He thoroughly discussed how tradition trading systems evolved into automated trading systems over past few years. Following are the topics that are covered in this presentation,
1) Significance of Latency
2) Traditional Trading System Architecture
3) Automated Trading System Architecture
4) Low Latency
5) Current Scenario
6) Performance Degradation with Throughput
7) Causes of Degradation
8) Parallel computing
9) Network Effects
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11) Spread Networks
12) Microbursts
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14) Technology Mix
15) Tips
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-Quiet Period
-Management
-Board of Directors
-Corporate Governance
-Corporate and Capital Structure
-Equity Incentives
-Financial and Audit Matters
-Getting Started
-SEC Review
-Life as a Public Company
This presentation provides a highlight of the key issues in the management of Market Risk. It touches briefly some of the elements of the Basel 2 Accord with respect to Market Risk
Technology Edge in Algo Trading: Traditional Vs Automated Trading System Arch...QuantInsti
This presentation was delivered by QuantInsti director and co-founder Mr Sameer Kumar at a workshop on 'Technology Edge in Algorithmic Trading' organized at Finbridge Expo 2015, Mumbai on 14th March 2015.
This event was India’s first ever integrated financial service providers’ exhibition that brought together top mutual funds, insurance companies, leading brokers, banks or financial institutions, fund managers, decision makers along with thousands of retail financial market participants, distributors, investors and vendors.
In this workshop Mr Sameer Kumar has explained how latest technology has changed trading environment and how you can increase your profits by taking advantage of it. He thoroughly discussed how tradition trading systems evolved into automated trading systems over past few years. Following are the topics that are covered in this presentation,
1) Significance of Latency
2) Traditional Trading System Architecture
3) Automated Trading System Architecture
4) Low Latency
5) Current Scenario
6) Performance Degradation with Throughput
7) Causes of Degradation
8) Parallel computing
9) Network Effects
10) Latency by Distance
11) Spread Networks
12) Microbursts
13) Latency Breakdown
14) Technology Mix
15) Tips
16) Sample Solution Path
This presentation will help you understand the traditional and automated trading system architecture, it will explain you the significance of latency in an automated trading environment and few tips along with a sample solution path.
Explores:
-IPO Process
-Impact of JOBS Act
-Quiet Period
-Management
-Board of Directors
-Corporate Governance
-Corporate and Capital Structure
-Equity Incentives
-Financial and Audit Matters
-Getting Started
-SEC Review
-Life as a Public Company
This presentation provides a highlight of the key issues in the management of Market Risk. It touches briefly some of the elements of the Basel 2 Accord with respect to Market Risk
Essential Real Estate Modeling in ExcelAsen Gyczew
What is the aim of this course?
Modeling real estate in Excel is not easy. In real estate, you will have to forecast the cash flow for long investment periods. In most models, you will have to forecast loan payments, maintenance costs, operational costs, and potential revenues from operating the real estate. On top of that, in real estate, we have different business models that will have different business drivers. To make your work easier, I will teach you in this course how to model in Excel fast and efficiently real estate investments.
In this course you will learn the following things:
1. Essential concepts related to real estate and modeling them in Excel
2. What are the main drivers of the profits in real estate for different business models
3. How to model buy & rent of real estate in Excel
4. How to model in Excel hotels and other short-term renting businesses (Airbnb, booking.com)
5. How to model in Excel flips/flipping
6. How to make decisions on the investment in real estate, based on the Excel model
For more information check my online course: https://bit.ly/RealEstateModels
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Saskia Bussink - Investing in property - Do it yourself or learn from meSaskia Bussink
Since 2013 I have been a professional property investor. Got educated in UK through trainings and mentorship. My main investing area’s are Scotland England.
I have been a property mentor since 2018. , in combination with being a business coach. It makes me happy to see other people grow in themselves, with their business and in generating passive income streams.
Why I am doing this is because I love my freedom ❤️
In this slideshow I'll show you my path, the numbers, about the WHY and strategy.
Learn it yourself or invest in one of my projects.
Need to know more and see how I could help you? Go to
Saskiabussink.com/vastgoed-in-engeland
(in Dutch).
Regards Saskia Bussink
Cracking the Workplace Discipline Code Main.pptxWorkforce Group
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Forward-thinking leaders and business managers understand the impact that discipline has on organisational success. A disciplined workforce operates with clarity, focus, and a shared understanding of expectations, ultimately driving better results, optimising productivity, and facilitating seamless collaboration.
Although discipline is not a one-size-fits-all approach, it can help create a work environment that encourages personal growth and accountability rather than solely relying on punitive measures.
In this deck, you will learn the significance of workplace discipline for organisational success. You’ll also learn
• Four (4) workplace discipline methods you should consider
• The best and most practical approach to implementing workplace discipline.
• Three (3) key tips to maintain a disciplined workplace.
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Looking for professional printing services in Jaipur? Navpack n Print offers high-quality and affordable stationery printing for all your business needs. Stand out with custom stationery designs and fast turnaround times. Contact us today for a quote!
"𝑩𝑬𝑮𝑼𝑵 𝑾𝑰𝑻𝑯 𝑻𝑱 𝑰𝑺 𝑯𝑨𝑳𝑭 𝑫𝑶𝑵𝑬"
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𝐓𝐉 𝐂𝐨𝐦𝐬 provides unlimited package services including such as Event organizing, Event planning, Event production, Manpower, PR marketing, Design 2D/3D, VIP protocols, Interpreter agency, etc.
Sports events - Golf competitions/billiards competitions/company sports events: dynamic and challenging
⭐ 𝐅𝐞𝐚𝐭𝐮𝐫𝐞𝐝 𝐩𝐫𝐨𝐣𝐞𝐜𝐭𝐬:
➢ 2024 BAEKHYUN [Lonsdaleite] IN HO CHI MINH
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➢ Winner [CROSS] Tour in HCM
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A personal brand exploration presentation summarizes an individual's unique qualities and goals, covering strengths, values, passions, and target audience. It helps individuals understand what makes them stand out, their desired image, and how they aim to achieve it.
RMD24 | Retail media: hoe zet je dit in als je geen AH of Unilever bent? Heid...BBPMedia1
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As an Army veteran dedicated to lifelong learning, I bring a disciplined, strategic mindset to my pursuits. I am constantly expanding my knowledge to innovate and lead effectively. My journey is driven by a commitment to excellence, and to make a meaningful impact in the world.
2. Topics covered
• The valuation of reversionary commercial real
estate assets
• The term and reversion approach
• The layer (or hardcore or slicing) approach
• Putting the techniques into practice
3. Reminder: the simple Net Initial Yield
Method
• The textbook format
Rent passing
Years Purchase in
perpetuity @ 3.78%
£130,000
26.4550
Valuation (gross of costs)
£3,493,153
Valuation (net of costs)
£3,250,000
All that is really going on
here is that we are using
deals to find out how many
times the rent, properties are
selling for –in this case
26.455. We’re using that to
value similar properties and
multiplying their rents by
26.455. It’s also the same as
dividing the rent paid by
3.78%
5. Valuing Reversionary Properties
• There are other methods for valuing reversionary properties.
• Properties where the tenant is paying less than it’s worth. Where
the Market Rent is higher than the rent paid
• There are two basic approaches to valuing such properties.
– Get the value of the rent paid until rent review
– Get the value of the right to receive the rent after rent review,
– Then add them together
• Or
– Get the value of the right to receive the rent paid forever
– Add the value of the right to get uplift (above the rent paid)
forever.
• For example, let’s value a shop on Oxford Street that has a 10 year
lease with three years until the first rent review. The rent passing is
£100,000 and the Market Rent is £125,000.
7. Rent
Trying to show that
it’s a perpetuity
Market Rent - £125,000
Rent paid – £100,000
3
Years
Rent review
This is meant to
represent the value
of the right to get
£100,000 for three
years.
This is typically called
the term
The value of the
property is the values
of the term and the
reversion added
together
This is meant to represent the
value of the right to get
£125,000 in perpetuity but it
doesn’t start for three years
This is typically called the
reversion
9. Rent
Another way of doing this is to split up the rental
incomes differently so…
Market Rent - £125,000
Rent paid – £100,000
3
Years
Rent review
This is meant to
represent the right to
get £100,000 forever.
This is typically called
the bottom slice or
core
The value of the
property is the values
of the core and the
‘top slice’ added
together
This is meant to represent the
right to get £25,000 in
perpetuity but it doesn’t start
for three years
This is typically called the top
slice
11. Rent
You need four pieces of information to value a
reversionary property – if you’re not using a simple NIY
approach
Market Rent - £125,000
Rent paid – £100,000
3
Rent review
Years
The fourth variable is the yield.
Although I really don’t like to do this we’ll assume the yield for the
moment – we’ll go with 5%.
So now we have the four pieces of information
1. The rent passing - £100,000
2. The Market Rent - £125,000
3. The Term – 3 years
4. The Yield – 5%
12. The Textbook Layout
Step One – value the term
Rent passing
YP 3 yrs @ 5%
£100,000
2.7232
£272,320
2.7232*£100,000
Step Two – value the reversion
Market Rent
£125,000
YP in perp @ 5%
20
PV 3 yrs @ 5%
0.8638
£2,159,594
Valuation (gross of costs)
Market Value
£2,431,914
£2,298,595
£125,000*20*0.8638
£273,320 + £2,159,914
£2,431,914/1.058
13. Let’s value it using the slicing or layer or hardcore method – (jarg…)
Step One – value the core
Rent passing
YP in perp @ 5%
It’s the same value as before.
£100,000
20
£2,000,000
Using a food metaphor, we’ve just
sliced up the pizza differently. The
pizza doesn’t change in size.
We’ve applied 5% to the same rents
in both valuations.
Step Two – value the top slice
Market Rent
£25,000
YP in perp @ 5%
20
PV 3 yrs @ 5%
0.8638
£431,900
Valuation (gross of costs)
Also remember that all rents are in
current terms. Expectations about
rental growth are implied in the
yield.
£2,431,900
Slight rounding difference
Market Value
£2,298,582
14. Rent
Just to be clear….
Market Rent - £125,000
£431,900
Rent paid – £100,000
£2,000,000
Years
3
Rent review
The top slice
This is the value of
the core
15. For the term and reversion…
Rent
Market Rent - £125,000
Rent paid – £100,000
£272,320
£2,159,594
Years
3
Rent review
This is the value of the term
This the value of the reversion
So, where does the 5% come
from?
16. Yields come from deals.
Yields come from comparables
Let’s say that a similar shop nearby recently sold for £3,653,000. It was let to Gap two years and three
months ago on a 15 year lease with upwardly only rent reviews every five years at a rent of £146,100 per
annum. The Market Rent is now estimated to be £200,000 per annum.
Well, we basically need to work out the single yield (termed the equivalent yield) applied to both the term
and the reversion (or the top and bottom slice) that produces a value of £3,653,000. Like the IRR, you have
to use iteration (trial and error). The answer is 5% (equivalent yield analysis is for another presentation)
Rent passing
YP 2.75 yrs @
£146,100
5%
2.5112
Value of term
£366,890
Market Rent
£200,000
YP in perp @
5%
20.0000
PV 2.75 yrs @
5%
0.87444
Value of reversion
£3,497,755
Valuation (gross of
costs)
£3,864,645
Market Value
£3,652,784
Key Point: This deal has
informed valuers that a
similar asset has sold at
price that reflects a 5%
equivalent yield
applied to both the
term and the reversion.