Strike formula in 602 smoothly

Aug 6th, 2022
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How to Strike formula in 602

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[Music] [Music] hasty nation and welcome back to mike and his whiteboard my name is mike this is my whiteboard and today were going to take a step back and talk about strike price so if youre brand new to trading strike price is going to be something that youre definitely going to want to learn about if youre more advanced or a veteran its still good to go back and i think its really important to just get a great understanding and hear it from different angles to make those light bulbs pop so were going to get into strike price and talk about some different things about that today so when were talking about strike prices with options what i like to think of it as is essentially where i choose to become long or short stock so depending on what option im trading theres going to be different strike prices in different expirations and essentially different products are going to offer different strike prices so when were looking at higher price underlyings you might see strike pr

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Strike rate: The strike rate defines the interest rate at which the cap provider begins to make payments to the cap purchaser. The lower the strike rate, the more likely that a cap provider will need to make a payment during the term of the cap.
The strike rate sets your interest cap in stone by establishing the percentage that your interest payments cannot exceed. If your interest rate was set at 3%, with a cap of 2%, your strike rate would be defined as 5%.
In a rate cap transaction, a borrower and hedge provider agree to a maximum interest rate, known as the cap rate or strike rate. If the floating interest rate index governing the underlying loan (the loan index rate), typically LIBOR, climbs above this strike rate, the hedge provider pays the borrower the excess.
The predetermined interest rate level is called the strike rate. An interest rate cap specifies that the seller agrees to pay the buyer if the reference rate exceeds the strike rate. An interest rate floor specifies that the seller agrees to pay the buyer if the reference rate is below the strike rate.
Strike Rate means a fixed rate of interest under the Cap Agreement that does not exceed the Original Strike Rate.
The strike rate sets your interest cap in stone by establishing the percentage that your interest payments cannot exceed. If your interest rate was set at 3%, with a cap of 2%, your strike rate would be defined as 5%.

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