anyone has an idea how to hedge this? any help will be appreciatedthe 1 yr structure starts with a normla DNT with a range spot +/- 500 pips, say spot EUR/USD 1.2200 the first range = 1.1700 to 1.2700, but then the +/-500 pip range is reset quarterly with the new spot in the middle.

anyone knows the derivatives structure behind the Target Redemption Notes please?

Ziggy,Thanks but do you mean we need both comp 1 and 2? Why isn't either one suffice the need?

anyone knows how to structure an equity linked target redemption note? specifically what options are used?

<t>I'm new to rainbow options. Let's take a 2 color rainbow call that delivers the best return of 2 assets for example. It seems to me it only makes sense if the price of the 2 assets are pretty close to each other, say, 100 and 96 or so. If I have 2 stocks, s1=100, s2=1.27, how should an investor s...

Theorectically, you hedge a range accrual note by selling a series of digital call at the upper bound, and a series of digital put at the lower bound. However, in reality, is this true? If so, do you sell the options everyday, or you sell the whole series on day one? How is it actually done?

does anyone know anything about this structure? any info will be appreciated

<t>I got swiss clients presenting to me a target achiever (or sometimes called target redemption) note. it's like this:target level: 15%tenor = 10 yrs1st yr coupon: 13%2nd yr and on coupon: 7.5% - (2 x 6mth LIBOR)whenever the total coupon accumulated reached 15%, the bond is called, otherwise, hang ...

<t>FDAXHunterGreat info. Thanks. But pardon my ignorance, which brings to 2 futher questions:1) what do you mean by "negative delta on the back leg and positive delta on the front leg"?2) how do you use a calendar spread and a payer swap in this case? And on what's the underlying for the calendar sp...

If a flattening yield curve is anticipated, what kind of trade would benefit from it?

If a flattening yield curve is anticipated, what kind of trade would benefit from it?

Hunter,The price 85 is set by the issuer after the investor names the cap. So my question is how is that discount (which is 15), or the price of 85 is setPigboy

<t>Anyone with an idea how to break this instrument down to the building blocks:Say the spot stock price is 100. An investor can name a cap level of 115. He's allowed to purchase the note now at a price of 85. At maturity, he forgoes any upside above 115 but pockets whatever between 85 and 115. Ther...

<t>Rann,It's not intuition. I don't know if they would allow you, but check say, Reuters Dealing records and you can very easily see the data such as how many deals are traded at one time, and how many DIFFERENT prices were reached at that very same moment.When I work on the trading floor, there wer...

<t>Rann,In reality.I was the chief FX dealer of a European bank for several years. No disrespect intended, but indeed, if you had a chance to sit in at a FX spot desk for a couple of days, you know what I'm talking about.Think about this: there's no CENTRALIZED exchange in FX. Thousands of pairs of ...