why did we calculate the profit on a ‘3 month forward’? Is that a rule that we have to learn or will we always be assuming that it is a 3 month forward whether it is mentioned in the question or not?
Hi, Instead of saying 拢100,000 x (95-92/400) which gives 拢750, incase we forget the 400 bit in the exams, can we also do this 拢100,000 x (95-92/100) x 3/12 which gives the same result as 拢750? Please advise. Thanks
Those are real great lectures and presented very well by a great teacher.
I would rate them the best as I now understand the concept of Interest Rate Risk Management. I struggled a lot with textbook earlier but got hold of the topic only with these lectures.
Arun says
Hi John,
why did we calculate the profit on a ‘3 month forward’? Is that a rule that we have to learn or will we always be assuming that it is a 3 month forward whether it is mentioned in the question or not?
Thanks.
John Moffat says
I assume you are talking about futures. They are always 3 months futures (unless specifically told differently, which is very unlikely).
(We don’t refer to futures as being ‘3 month forward’ – forward rates are something different.)
kurtlan says
John,
I was working Question 2 December 2011. I got up to where I was calculate the Gain on the futures market.
I followed your steps “Contract value x (Change in Futures/400)” but I noticed I was going wrong.
Can you tell me what impact does tick size and tick value has on this calculation?
John Moffat says
There has never been a need to use ticks, but it gives the same result anyway.
1 tick is a movement of 0.01 in the futures price. The profit or loss on a 1 tick movement is 0.01 x contract size / 400.
So the total profit or loss is the number of ticks change, times the profit or loss for a 1 tick movement.
aishaasad says
Hi i am facing the same problem the video screen is black.
opentuition_team says
See the support page / try another browser
John Moffat says
Have you looked the technical support page?
The link to it is above.
deepmaharaj says
Thanks Opentution. Nobel Job. God bless.
lakeside says
Hi, Instead of saying 拢100,000 x (95-92/400) which gives 拢750, incase we forget the 400 bit in the exams, can we also do this 拢100,000 x (95-92/100) x 3/12 which gives the same result as 拢750? Please advise. Thanks
rene12311 says
Only relevance for 3 month in exam, so remeber to divide 400.
John Moffat says
But dividing by 100 and then multiplying by 3/12 (or 1/4) is exactly the same as dividing by 400 馃檪
If you find it easier to remember than fine! 馃檪
utn9 says
Simple and straight forward. Good job…..
annetamandani says
this is great!
asifgfm786 says
Those are real great lectures and presented very well by a great teacher.
I would rate them the best as I now understand the concept of Interest Rate Risk Management. I struggled a lot with textbook earlier but got hold of the topic only with these lectures.
Thanks a lot.
John Moffat says
Thanks 馃檪
s k says
The video is quite helpful, thanx opentuition, it is a very good initiative to anderstanding this topic from a real business perspective