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Module 8 · Expert

Expert Knowledge

Option Greeks and Black-Scholes, duration and convexity, financial statement analysis, performance measurement and Monte Carlo withdrawal plans – the maths behind professional tools, step by step.

  1. 1The Greeks: Delta, Gamma, Theta and VegaHow strongly does an option react to price, time and volatility? Delta, gamma, theta and vega explained step by step – with worked examples and an option lab to experiment with.7 min
  2. 2How Options Are Priced: Binomial Trees, Black-Scholes and Put-Call ParityWhy you can calculate the fair price of an option without knowing whether the stock will rise – from the binomial tree and risk-neutral valuation to the Black-Scholes formula and put-call parity.7 min
  3. 3Duration, Convexity and Interest Rate RiskMacaulay and modified duration, DV01, convexity and immunisation – how professionals measure the interest rate risk of bonds and why falling rates help more than rising rates hurt.6 min
  4. 4Advanced Financial Analysis: DuPont, Working Capital and Earnings QualityWhere a high return on equity really comes from, how much cash is tied up in working capital and how to spot dressed-up profits – DuPont analysis, the cash conversion cycle and accruals step by step.6 min
  5. 5Measuring Performance: Sharpe, Sortino, Alpha and Factor RegressionTime-weighted and money-weighted returns, Sharpe and Sortino ratios, tracking error and information ratio, alpha by regression – and how many years it takes to tell skill from luck.6 min
  6. 6Withdrawal Planning: the 4% Rule, Sequence Risk and Monte CarloHow much can you take out of a portfolio each year without running out of money? The 4% rule and its limits, sequence risk in numbers, Monte Carlo simulations and flexible withdrawal strategies.6 min

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