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2020 derivatives strategies removal

I feel like we haven’t talked about this much…

Derivative strategies for 2020 is completely removed. That includes:

  • Interest rate swaps/futures
  • Currency swap/futures
  • Equity swap/futures
  • Synthetic long/short asset/put/call/currency
  • Covered calls, protective puts, collars
  • Spreads, straddles, strangles
  • Breakeven prices and strategies

On the one hand, I knew most of this stuff and while it could be tricky it wasn’t close to the hardest stuff on the overall test, but on the other hand I’m not upset about all this being removed either.

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Shauncore, 

What part of derivatives remains from 2019? Last year there was three readings: 

Reading 39 - Pricing and Valuation Forward Commitments 

Reading 40 - Valuation of Contingent Claims 

Reading 41 - Derivatives Strategies 

Thank you, 

Oak

I believe they are going to include them in Level 3 material.

dasstienn wrote:

I believe they are going to include them in Level 3 material.

Is this just a hunch? 

oakwood42 wrote:

dasstienn wrote:

I believe they are going to include them in Level 3 material.

Is this just a hunch? 

It is for sure. The Level III errata is out and it includes derivatives strategies in it since it’s mostly a portfolio management (biggest part of LIII) subject.

For those who wants to get a quick run through the 2020 syllabus for Level 2:

https://youtu.be/a-R0Bi6Vdag

——————————————
Find useful resources on the CFA exams at http://www.youtube.com/c/FabianMoa

It does make more sense for that topic to be on level 3. 

Derivatives strategies were pushed to level 3. Glad I put in the efforts to get the concepts right in level 2, they were one of my favourite chapters. 

Shauncore wrote:

I feel like we haven’t talked about this much…

Derivative strategies for 2020 is completely removed. That includes:

  • Interest rate swaps/futures
  • Currency swap/futures
  • Equity swap/futures
  • Synthetic long/short asset/put/call/currency
  • Covered calls, protective puts, collars
  • Spreads, straddles, strangles
  • Breakeven prices and strategies

On the one hand, I knew most of this stuff and while it could be tricky it wasn’t close to the hardest stuff on the overall test, but on the other hand I’m not upset about all this being removed either.

I haven’t focused too much on this but so far, derivatives has been 1) technicality&valuation on L2 2) strategies on L3. If they’re going to push everything to L3, I feel like it’s going to be a ****show. To understand a strategy, you need to understand the pricing/ technical stuff that leads to it.

If you're the first out the door, that's not called panicking

Codtrawler87 wrote:
Shauncore wrote:
I feel like we haven’t talked about this much…

Derivative strategies for 2020 is completely removed. That includes:

  • Interest rate swaps/futures
  • Currency swap/futures
  • Equity swap/futures
  • Synthetic long/short asset/put/call/currency
  • Covered calls, protective puts, collars
  • Spreads, straddles, strangles
  • Breakeven prices and strategies

On the one hand, I knew most of this stuff and while it could be tricky it wasn’t close to the hardest stuff on the overall test, but on the other hand I’m not upset about all this being removed either.

I haven’t focused too much on this but so far, derivatives has been 1) technicality&valuation on L2 2) strategies on L3. If they’re going to push everything to L3, I feel like it’s going to be a ****show. To understand a strategy, you need to understand the pricing/ technical stuff that leads to it.

And the reason for employing it.

Simplify the complicated side; don't complify the simplicated side.

Financial Exam Help 123: The place to get help for the CFA® exams
http://financialexamhelp123.com/

Wonder if this will bring down the L3 pass rate then…3 x exams in low- to mid-40 pass rates

CA, CFA, FRM

Shauncore wrote:

oakwood42 wrote:

dasstienn wrote:

I believe they are going to include them in Level 3 material.

Is this just a hunch? 

It is for sure. The Level III errata is out and it includes derivatives strategies in it since it’s mostly a portfolio management (biggest part of LIII) subject.

Thank you

oakwood42 wrote:

dasstienn wrote:

I believe they are going to include them in Level 3 material.

Is this just a hunch? 

you are hunch

couldnt have they removed them when i took l2 laugh

really hope theyre not in l3 material !

layi01 wrote:

really hope theyre not in l3 material !

They are

Derivative strategies are simple geometry. Here is how: https://www.youtube.com/watch?v=eC2yo0Xn_bg 

layi01 wrote:

really hope theyre not in l3 material !

It was one of the best readings so far.

Derivative strategies are fun!

And easy, as it turns out.

Simplify the complicated side; don't complify the simplicated side.

Financial Exam Help 123: The place to get help for the CFA® exams
http://financialexamhelp123.com/