Volatility Skew and Smile
In practice, if implied volatility is computed for actual traded options on a particular underlying (e.g. a stock) the option …
delta hedge
Module 40.4 & 40.7 LOS 40.k, 40.i: Option Greeks, Synthetic Position, Delta Hedges, Hedge ratio arbitrage
Put-Call Parity and Synthetic Positions Put-call parity is the principle used to generate synthetic longs and shorts. The equation equates …