Research for options assignment has begun. The assignment was posted up by the prof yesterday and my team mates shot emails out for discussion. I’m more than 75% done with revision of those topics covered in the 1st intensive. It’s quite an ideal time to work on assignment as I foresee more reading required.
Intuitively I googled the key words of the assignment and the whole world opened before me. Downside of that is the overload of information and the need to filter through for the relevant points.
This whole assignment is much about black-scholes .. binomial..and arbitrage volatility. While the underlying concepts are not that complex, application is. To spot the under or over priced option is the first challenge. In that market swarmed with numerous options, how to sieve out the gold from the pebbles?
We had a department lunch at tung lok yesterday. Food was pretty impressive and so was the price that came with it. Not somewhere I will treat myself to, so thankfully the bill was foot by the fc.
During the meal, ag went around the table and asked us what we would want to work as upon retirement. 2 wanted to start a f&b outlet, 2 wanted to enjoy life of a tai-tai, 1 wanted to open a fruit stall..1 wanted to open a handicraft shop..etc. my reply was simple. I wanted to trade.
“trade what?” ag asked.
“shares” I replied.
More than shares actually. I found no need to elaborate then and there.
I wanted to manage a portfolio. Trade a spectrum of shares and derivatives; putting what I am now learning into use.
Somehow, I feel trading will keep my retirement days alive as it will require me to keep abreast with what goes on in the world. From there, I must deduce how it will impact the market and how it will react. And of course, all of that requires some luck too =)
For now, back to learning the models and Greeks. It may not beat the market but at least it helps me make sound decisions. We don’t live by rules but they help set boundaries for us, isn’t it so?
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