Finance &amp; Consulting - Sixth Form FAQ:

Original post by Trapz99

Lol I swear you study this stuff at university. You're an expert on this lol. Enjoy your internship

ahh i was just curious if someone can explain to me why someone would want to buy an option that's all.

Reply 21

username738914

Original post by Trapz99

Lol I swear you study this stuff at university. You're an expert on this lol. Enjoy your internship

You could have quickly searched and said 'it's for insurance' :tongue:

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Reply 22

Original post by gr8wizard10

ahh i was just curious if someone can explain to me why someone would want to buy an option that's all.

You can use it to speculate and to hedge.

Original post by Princepieman

You could have quickly searched and said 'it's for insurance' :tongue:

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Yeah but I don't want to cheat on gr8wizard's tests lol

Reply 23

Original post by Trapz99

You can use it to speculate and to hedge.

what's an example where i can use an option to speculate? this is all interesting stuff

Reply 24

Original post by gr8wizard10

but why would anyone want to buy these things? why can't i just buy the security at the specific time without paying for this option, what's the difference?

so i'm buying a piece of paper (contract)? i'm rather confused

There's lots of reasons mofo

The most important one IMO is that you think the stock is going to go a certain away and you can profit from the difference. They're also used to hedge against changes in prices and markets you are not speculating in but might affect your returns if you don't hedge

Reply 25

i bet you don't know how to properly construct a convertible bond arbitrage

Reply 26

Original post by MnWhCntBMvd

what does a 'certain away' mean?

Reply 27

Original post by gr8wizard10

what's an example where i can use an option to speculate? this is all interesting stuff

You could buy a call option which gives you the right to buy a share of Microsoft for £25 in Janaury 1st 2017. The price of a share of Microsoft then rises to £35 on January 1st 2017. So you use that call option to buy that share of Microsoft, sell it and make £10 of profit.

Reply 28

username738914

Original post by Trapz99

Forgot the cost of the option bro

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Reply 29

Original post by Princepieman

Forgot the cost of the option bro

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I don't know, £5? So £5 profit.

Reply 30

Original post by Trapz99

This doesn't really get to the heart of why you would want to use an option. Why not just go long or short on MFST?

It's all about leverage while minimising downside

(edited 7 years ago)

Reply 31

Original post by MnWhCntBMvd

This doesn't really get to the heart of why you would want to use an option. Why not just go long or short on MFST?

It's all about leverage while minimising downside

Bruh why are you bothering... this has little to do with the thread
Do you evenwork in finance/ study it?

Reply 32

Original post by MnWhCntBMvd

i bet you don't know how to properly construct a convertible bond arbitrage

I bet you don't even know how to price Bermudan Swaptions

Reply 33

Original post by Trapz99

I bet you don't even know how to price Bermudan Swaptions

Who cares lol

You only need to be good at pricing one type of asset. If you can be really good at that and identify small mispricings in the market, you can use leverage to become phenomenonally wealthy.

Reply 34

KingBach12

Original post by Princepieman

Rounded up data for spring weeks, summers and grad from the past 5 ish years (recent 2-3 years from friends and some scraped data from prior summer/SW threads on here). Also reflects the linkedin list that I don't think is published anymore.

What do you disagree on and why?

Posted from TSR Mobile

Ok fair enough, would be interested to see the raw data if you have that? My perception is just based of my personal experience and anecdotes from friends/other attendees so your methdology is likely to be more accurate. But from what I've encountered:

Tier 1: Cambridge, LSE, Oxford
Tier 2: Warwick and UCL
Tier 3: Imperial, Durham, St Andrews + (Bristol and Bath at some events)
Tier 4: Edinburgh, KCL + (Exeter and Leeds sometimes)
Tier 5: The rest I don't see frequently appearing

I realise people will disagree with me as well, but this is just what I've encountered so please don't take offense if I've omitted your uni or placed your uni in a tier you disagree with

(edited 7 years ago)

Reply 35

Original post by KingBach12

The only reason Imperial might have fewer people in finance is because they tend to be less interested in that career on average compared to somewhere like LSE

Reply 36

username738914

Original post by KingBach12

Eh, wouldn't put them into tiers this way tbh - all of the top 6 have higher placement numbers overall than the others. But as you can see, the same names show up - albeit you're missing Notts which shows up a crapload.

It's a lot of data man, you can get a glimpse at snippets of it if you look for the spring week 2016 stats thread and look in the high finance thread. In total it's probably 1-2k datapoints.

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Reply 37

KingBach12

Original post by Trapz99

The only reason Imperial might have fewer people in finance is because they tend to be less interested in that career on average compared to somewhere like LSE

I don't doubt that, my 'tiering' is just based off what I saw.

Original post by Princepieman

I put it in tiers because those in higher tiers were more frequently represented, that is the only reason. I didn't see as many Imperial students as I did LSE students hence why they are not in the same tier even though Imperial is a 'target school'.

Reply 38