Baruch MFE Baruch MFE Facebook Contest

[AlexandreH]

post the answer here, since it was a technology problem.

Is the question on the wall? Can't see it.
The most recent thing I see on the wall is :
The first questions coming up in 3hours (and two minutes )

Weird!!!

 

[dstefan]

On the wall:

What is the Delta of an at-the-money put option?

 

[ashwani]

Delta of ATM long call is 0.5 and ATM long put is -0.5

 

[Andy Nguyen]

@AlexandreH
You have to click on Baruch MFE on the top right. Or toggle between Top Posts/Most Recent.

 

[dstefan]

post the answers on Facebook only, unless you have technical difficulties.

 

[AlexandreH]

Short answer: -0.5.

 

[Joy Pathak]

A great question! I have been asked this in many interviews!

 

[dstefan]

Scores after the first question:

Devdeep Sarkar 1.5 points (wrong first answer)
ashwani 1 point
AlexandreH 1 point
Shantanu Dikshit 0 points
Patrik Karlsson 0 points
Shantanu Dikshit 0 points

 

[dstefan]

ashwani, AlexandreH - form now on, only post answers on Facebook.

 

[dstefan]

Answer: the delta of an ATM put is a slightly higher than -0.5 (for almost all instances).

From Put-Call parity, Delta(P) = Delta(C) - 1.
The Delta of an ATM call is slightly higher than 0.5 (for a non-dividend-paying underlying asset). If Delta(C) = 0.5 + d, with d>0, then
Delta(P) = -0.5 + d > -0.5

 

[Devdeep]

Scores after the first question:

Devdeep Sarkar 1.5 points (wrong first answer)
ashwani 1 point
AlexandreH 1 point
Shantanu Dikshit 0 points
Patrik Karlsson 0 points
Shantanu Dikshit 0 points

I was taught from my childhood: "Read the Question "carefully" at least a couple of times before you answer it." - I guess it was time to re-learn it today!!!
Thanks, Prof. Stefanica.

 

[dstefan]

better to learn it in these circumstance than later on. and, after all, you are still leading, and learned the lesson

 

[Devdeep]

Definitely!

 

[dstefan]

The second question to be posted at 12noon New York time at http://www.facebook.com/BaruchMFE

 

[dstefan]

a second question will be posted in 30 minutes

 

[dstefan]

the second question was just posted at http://www.facebook.com/BaruchMFE

good luck, and enjoy!

 

[AlexandreH]

did anyone answer?

 

[Cannybs]

How to post the answer? I don't seen any "post" button there.

 

[dstefan]

four people answered, including you, Alex.

the 3 point solution will be posted at 1pm EST.

 

[Cannybs]

Solved that finally!