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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Exam June'15 (Daikon Co.)
the scenario, it has tick size 0.01% tick value $25. The premium and gain on option, they don’t take 3/12. can you explain? thanks.
Have you watched the free lectures and as a result calculated the tick value?
The calculation of the tick value already includes the 3/12!
The contract size is $1M, the tick size (as always for interest rate futures) is 0.01.
Therefore the value of a 1 tick movement on 1 contract is $1M x 0.01/100 x 3/12 = $25,
There is never any need to use ticks in the exam (unless you want to) – I never do 🙂
Thanks Mr. Professor!
You are welcome 🙂