From AI to the end of Swaps. It’s taking an awful amount of brainpower to review for 10% of the test. What are your two cents on this book?
Reading 42 on options kicked my ass but I got through it, albeit, it took me twice the effort than other sessions. Keep pushing, the finish line is just around the corner.
Still, much easier than LII derivatives in my opinion.
are you guys memorizing the option payoff calculations? schweser said its not worth it…
i will try…
No need. If you work a few problems you’ll see that you can just reason through the payoffs position by position. I find those formulas confusing actually, so I don’t even look at them.
I agree, I don’t see the point to memorizing the formulas for the payoffs. They don’t help you understand the position, if you understand the position you’ll be able to figure out the payoffs on your own. The one thing that I think can be a little bit less intuitive is figuring out the max payoff/loss of some of the positions.
Chi Paul Wrote: ------------------------------------------------------- > No need. If you work a few problems you’ll see > that you can just reason through the payoffs > position by position. I find those formulas > confusing actually, so I don’t even look at them. I just started the Options reading, but at least so far, I agree. The payoff equations are really confusing. It makes more sense to me to just reason throughit: what your underlying position is worth, + what premium you are paying/collecting, + the payoff on the option (if any).
My feeling about many L2 formulas, especially derivatives. If you understand the underlying position, it’s intuitive. + these formulas are ugly. Chi Paul Wrote: ------------------------------------------------------- > No need. If you work a few problems you’ll see > that you can just reason through the payoffs > position by position. I find those formulas > confusing actually, so I don’t even look at them.
I like v4 definitely much more than other books. Its quantitative and it seems to me more straightforward and easier to understand.
guys how have you made your way around the max/min loss and gain issues…there seems t be no intuition around them…any pointers to assist me?
Yeah, this stuff was painful. I’ve already forgot all of it, but I remember thinking it was painful when I was studying. Do we need to know all the charts for the option strategies (bull put spread, butterfly, etc.)? What’s a good way to burn those into my brain??
Phuck me, the interest rate calls/puts/collars/caps are even worse. Swaps from level 2 were easier. I’m having a hard time concentrating on this rate now. Very bad stuff.