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You're reading from  Mastering Python for Finance. - Second Edition

Product typeBook
Published inApr 2019
Reading LevelIntermediate
PublisherPackt
ISBN-139781789346466
Edition2nd Edition
Languages
Python
Tools
TensorFlow
Concepts
Financial Technology
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Author (1)
James Ma Weiming
James Ma Weiming
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James Ma Weiming

James Ma Weiming is a software engineer based in Singapore. His studies and research are focused on financial technology, machine learning, data sciences, and computational finance. James started his career in financial services working with treasury fixed income and foreign exchange products, and fund distribution. His interests in derivatives led him to Chicago, where he worked with veteran traders of the Chicago Board of Trade to devise high-frequency, low-latency strategies to game the market. He holds an MS degree in finance from Illinois Tech's Stuart School of Business in the United States and a bachelor's degree in computer engineering from Nanyang Technological University.
Read more about James Ma Weiming

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Bond options

When bond issuers, such as corporations, issue bonds, one of the risks they face is the interest rate risk. When interest rates decrease, bond prices increase. While existing bondholders will find their bonds more valuable, bond issuers, on the other hand, find themselves in a losing position, since they will be issuing higher-interest payments than the prevailing interest rate. Conversely, when interest rates increase, bond issuers are at an advantage, since they are able to continue issuing the same low-interest payments as agreed to on the bond-contract specifications.

To capitalize on interest-rate changes, bond issuers may embed options within a bond. This allows the issuer the right, but not the obligation, to buy or sell the issued bond at a predetermined price during a specified period of time. An American type of bond option allows the issuer to exercise...

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Mastering Python for Finance. - Second Edition
Published in: Apr 2019Publisher: PacktISBN-13: 9781789346466
© 2019 Packt Publishing Limited All Rights Reserved

Author (1)

author image
James Ma Weiming

James Ma Weiming is a software engineer based in Singapore. His studies and research are focused on financial technology, machine learning, data sciences, and computational finance. James started his career in financial services working with treasury fixed income and foreign exchange products, and fund distribution. His interests in derivatives led him to Chicago, where he worked with veteran traders of the Chicago Board of Trade to devise high-frequency, low-latency strategies to game the market. He holds an MS degree in finance from Illinois Tech's Stuart School of Business in the United States and a bachelor's degree in computer engineering from Nanyang Technological University.
Read more about James Ma Weiming

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