3 ms·
"It's the volatility that determines the prices" I thought this is only the case with contracts where the payoff is not linear, i.e. limiting the upside or dow
by light3 16y ago
"It's the volatility that determines the prices"
I thought this is only the case with contracts where the payoff is not linear, i.e. limiting the upside or downside. Future contract payoffs are linear f(t) = S(T) − K, so the upside is the same as the downside.