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Model assumptions & limits
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DOLLAR WORKSPACE / ADVANCED STRATEGY

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How to read this analysis

A Holder chooses a book first and a hedge second. The desk prices the hedge the reader has chosen on the paper's own seeded paths and its hedged excess over basis; sets the paper on the shelf against what a desk already does — hold the coin, lend it, overwrite it, carry it; draws the hedged and unhedged distributions; and runs the coin seat's drift sweep — all read in the dollar book or the coin book. The pricing section at the foot — the embedded put ladder on the surface and the risk-neutral fair value — says what the paper's embedded options are worth, in dollars.

Scenario assumptionsGBM60 months240 planned AgreementsSeed 42Edit assumptions

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Price model

Paper

Behavior

Book

Surface

implied vol %, by tenor × K/S bilinear between knots
tenor ↓ · K/S0.701.001.30
1m
3m
12m
24m

stylised illustration, not market data; import a real snapshot (quoted 0.70×–1.30× spot, 1–24 months; beyond the quotes the wing convention: total variance linear in ln K/S at the edge's own slope, Lee-bounded)

option pricing

The shelf

Hedge

preloads — the structures the risk paper runs, by the seat each is read on
Dollar strategy starting points
leg 1

buy put at the loss line at expiry, 3m, rolled at each expiry, 1 coins per Agreement, at origination

coins
1 of 8
no data — press Run