2020 derivatives strategies removal

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I feel like we haven’t talked about this much…
Derivative strategies for 2020 is completely removed. That includes:
  • Interest rate swaps/futures
  • Currency swap/futures
  • Equity swap/futures
  • Synthetic long/short asset/put/call/currency
  • Covered calls, protective puts, collars
  • Spreads, straddles, strangles
  • Breakeven prices and strategies
On the one hand, I knew most of this stuff and while it could be tricky it wasn’t close to the hardest stuff on the overall test, but on the other hand I’m not upset about all this being removed either.
 
Shauncore,
What part of derivatives remains from 2019? Last year there was three readings:
Reading 39 - Pricing and Valuation Forward Commitments
Reading 40 - Valuation of Contingent Claims
Reading 41 - Derivatives Strategies
Thank you,
Oak
 
oakwood42 wrote:
dasstienn wrote:
I believe they are going to include them in Level 3 material.
Click to expand...
Is this just a hunch?
Click to expand...
It is for sure. The Level III errata is out and it includes derivatives strategies in it since it’s mostly a portfolio management (biggest part of LIII) subject.
 
Derivatives strategies were pushed to level 3. Glad I put in the efforts to get the concepts right in level 2, they were one of my favourite chapters.
 
Shauncore wrote:
I feel like we haven’t talked about this much…
Derivative strategies for 2020 is completely removed. That includes:
  • Interest rate swaps/futures
  • Currency swap/futures
  • Equity swap/futures
  • Synthetic long/short asset/put/call/currency
  • Covered calls, protective puts, collars
  • Spreads, straddles, strangles
  • Breakeven prices and strategies
On the one hand, I knew most of this stuff and while it could be tricky it wasn’t close to the hardest stuff on the overall test, but on the other hand I’m not upset about all this being removed either.
Click to expand...
I haven’t focused too much on this but so far, derivatives has been 1) technicality&valuation on L2 2) strategies on L3. If they’re going to push everything to L3, I feel like it’s going to be a ****show. To understand a strategy, you need to understand the pricing/ technical stuff that leads to it.
 
Codtrawler87 wrote:
Shauncore wrote: I feel like we haven’t talked about this much…
Derivative strategies for 2020 is completely removed. That includes:
  • Interest rate swaps/futures
  • Currency swap/futures
  • Equity swap/futures
  • Synthetic long/short asset/put/call/currency
  • Covered calls, protective puts, collars
  • Spreads, straddles, strangles
  • Breakeven prices and strategies
On the one hand, I knew most of this stuff and while it could be tricky it wasn’t close to the hardest stuff on the overall test, but on the other hand I’m not upset about all this being removed either.
Click to expand...
I haven’t focused too much on this but so far, derivatives has been 1) technicality&valuation on L2 2) strategies on L3. If they’re going to push everything to L3, I feel like it’s going to be a ****show. To understand a strategy, you need to understand the pricing/ technical stuff that leads to it.
Click to expand...
And the reason for employing it.
 
Wonder if this will bring down the L3 pass rate then…3 x exams in low- to mid-40 pass rates
 
Shauncore wrote:
oakwood42 wrote:
dasstienn wrote:
I believe they are going to include them in Level 3 material.
Click to expand...
Is this just a hunch?
Click to expand...
It is for sure. The Level III errata is out and it includes derivatives strategies in it since it’s mostly a portfolio management (biggest part of LIII) subject.
Click to expand...
Thank you
 
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