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The lecture is awesome. Thanks very much.
Thanks for Nice Lecture. God Bless.
thank you! atleast now iam following.
This lecture was simply amazing for me, I was finding it hard to grasp the concept of futures. You explained it beautifully by comparing it to the Fwd exchange contracts and stock market… thank you, that was really very helpful
Thank you for your comments
Most welcome … I just wanted to ask one thing, why didn’t I see anything about lock in rate? I am a bit confused about that… thankyou
I am going to record more about lock-in rates.
For the moment, if you look at the examples in the revision notes for P4 (both currency futures and interest rate futures) you will find an explanation of lock-in rates.
sir can u please clear this concept of lockin rates? i went through all the notes and got the formula but in the revision kit it seems like a different approach. i would be thankful if u clear this concept of LOCK IN RATES CALCULATION.
If the difference between the spot rate and the futures price (the basis) was to stay constant, then the net effect of converting at whatever spot happens to be together with the profit/loss on the futures would be as though the transaction was fixed at the current spot.
However, the basis does not stay constant, but we can predict how it will change (by assuming that it falls linearly over the life of the future).
So we can predict the net effect of converting at spot and profit/loss on futures. The net effect will be effectively as though we convert the transaction at the current spot rate +/- the change in the basis by the date of the transaction. (The spot and the futures price will get closer together, the + or – is whichever makes them closer together). This is the lock in rate.
Alternatively (and this will give the same answer) the lock in rate is the current futures price +/- the basis at the date of the transaction.
thankss alot for the explanation! got the concept really well….but this is the doubt which is still there:
LAMMER PLC june 2006…. the basis is 0.486 and current future is 1.8986….. lock in is 1.8986+0.00486= 1.9035
my question is that how did this 0.486 change to 0.00486
The 0.486 is in cents. When it is quoted in dollars it becomes 0.00486
ooohhhhh thesee hidden secrets i spent soo many hours thinking what it was!!!
thanks again ! i will soon ask you some more questions on other topics that i have collected! hope to recieve such answers again !
No problem – but best to ask them in the P4 ‘Ask ACCA tutor’ forum, to make sure that I see them.
Thank you Open Tuition team!
excellent lecture. very clear. thank u!
I am unable to access the lecture videos! The error that i keep getting it this:
Server not found: rtmpt://r.acca.opentuitioncom.netdna-cdn.com:80/play
I am accessing the site behind a proxy, could this be the problem? Please help!
check the support page, http://opentuition.com/support/ most common problem is that you are behind a firewall
I HAVE DISABLE ALL FIREWALLS BUT YET STILL THE VIDEOS CAN NOT PLAY
What are you using to play lectures? PC?
please try google chrome – it really should work for you
(if not, then it is your ISP provider firewall blocking your access, so you should contact them to help you out
Dear admin,kindly add speed control for lectures if possible.
@faizan313, The lectures go at the same speed as they were delivered!!
You can always jump or pause them
Simplified, great work Sir
This lecturer deserves a gold medal! He does a wonderful job of explaining things in a simple neat manner. God bless you, sir!
Lectures on hedging are marvelous.I passed in this attempt only because of these.
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