option
http://plus.maths.org/content/taxonomy/term/425
enA risky business: how to price derivatives
http://plus.maths.org/content/risky-business-how-price-derivatives
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Angus Brown </div>
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In the light of recent events, it may appear that attempting to model the behaviour of financial markets is an impossible task. However, there are mathematical models of financial processes that, when applied correctly, have proved remarkably effective. <b>Angus Brown</b> looks at one of these, a simple model for option pricing, and explains how it takes us on the road to the famous Black-Scholes
equation of financial mathematics, which won its discoverers the 1997 Nobel Prize in Economics. </div>
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<div class="pub_date">December 2008</div>
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<p><i>In the light of recent events, it may appear that attempting to model the behaviour of financial markets is an impossible task. However, there are mathematical models of financial processes that, when applied correctly, have proved remarkably effective. In this article we look at one of these, a simple model for option pricing, and see how it takes us on the road to the famous Black-Scholes
equation of financial mathematics, which won its discoverers the 1997 Nobel Prize in Economics.</i></p><p><a href="http://plus.maths.org/content/risky-business-how-price-derivatives" target="_blank">read more</a></p>http://plus.maths.org/content/risky-business-how-price-derivatives#comments49Black-Scholes equationdifferential equationfinancial mathematicsfinancial modellingoptionMon, 01 Dec 2008 00:00:00 +0000plusadmin2344 at http://plus.maths.org/contentRogue trading?
http://plus.maths.org/content/rogue-trading
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John Dickson </div>
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The dangers of trading derivatives have been well-known ever since they were catapulted into the public eye by the spectacular losses of Nick Leeson and Barings Bank. <b>John Dickson</b> explains what derivatives are, and how they can be both risky, and used to reduce risk. </div>
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<div class="pub_date">Sep 2001</div>
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<p>I think it is still safe to say that most people have heard of Nick Leeson. In early 1995, Nick Leeson earned global notoriety when it was discovered that he had lost around $1.3 billion trading derivatives, bringing about the collapse of Barings Bank, one of the world's largest at the time. Nick was sentenced to six and a half years in jail. On his release he became the darling of the chat
shows and his story has since been glamorised in a film.</p><p><a href="http://plus.maths.org/content/rogue-trading" target="_blank">read more</a></p>http://plus.maths.org/content/rogue-trading#comments16arbitragecall optionderivative instrumentforward contracthedgingoptionpremiumput optionstrike priceFri, 01 Dec 2000 00:00:00 +0000plusadmin2187 at http://plus.maths.org/contentCareer interview: Financial modelling
http://plus.maths.org/content/career-interview-financial-modelling
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Mike Pearson </div>
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<div class="pub_date">September 1999</div>
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<p>Was it T.S. Eliot who, asked what advice he would give to an aspiring poet, said "to get a nice steady job in a bank"? David Spaughton works in a bank - but doesn't spend his life behind a counter, explaining why overdrafts can't be exceeded just like that. He works for an Investment Bank - Credit Suisse First Boston - producing and maintaining software for use in futures markets. We
interviewed David in his office at Credit Suisse in London.</p><p><a href="http://plus.maths.org/content/career-interview-financial-modelling" target="_blank">read more</a></p>http://plus.maths.org/content/career-interview-financial-modelling#comments9Black-Scholes equationBusiness & Moneycareer interviewcomputer programmingderivative instrumentfuturemathematical modellingoptionTue, 31 Aug 1999 23:00:00 +0000plusadmin2455 at http://plus.maths.org/content