Patrick Boyle is a hedge fund manager, a university professor and a former investment banker. This channel is all about quantitative finance. By subscribing you will see videos explaining what is happening in markets right now, you will learn about financial derivatives, corporate finance and how traders use quantitative tools like statistics. You will see interviews with some of the most interesting people in the financial industry. In addition, you will see some longer form documentaries on the history of financial markets.To contact Patrick go to the website http://onfinance.orgDISCLAIMER:This channel is not affiliated with any financial institution. The videos on this channel are for entertainment purposes only and do not constitute financial advice. Those seeking investment advice should seek out a registered professional. Patrick is not responsible for investment actions taken by viewers and his content should not be used as a basis for investment.Links:Amazon Author Page: https://amzn.to/3bTeqedPatreon: https://www.patreon.com/PatrickBoyleOnFinanceWebsite: https://www.onfinance.org/Instagram: https://www.instagram.com/patrickeboyle/BlueSky: https://bsky.app/profile/pboyle.bsky.social
What are forward rates? What are forward rate agreements? What is an FRA?
In todays video we will learn about forward interest rates and a derivative called a forward rate agreement or FRA.These classes are all based on the book Trading and Pricing Financial Derivatives, available on Amazon at this link. https://amzn.to/2WIoAL0 Check out our website http://www.onfinance.org/Follow Patrick on twitter here: https://twitter.com/PatrickEBoyleWhat are Forward Rates?A forward rate is an interest rate implied for periods of time in the future by zero-coupon bonds. For example, the market implied yield on a three-month Treasury bill three months from now is a forward rate.If we know what the three-month zero-coupon Treasury bill rate is and what the six-month zero-coupon Treasury bill rate is, we can back out what the market is implying as the yield on a three-month Treasury bill three months from now.To calculate forward rates we just need the zero-coupon yield curve.What are Forward Rate Agreements?A forward rate agreement (FRA) is an over-the-counter agreement to borrow a fixed amount of money at a fixed interest rate at a specified future time period.Banks and large corporations can use FRAs to hedge future interest rate exposures. The buyer hedges against the risk of rising interest rates, while the seller hedges against the risk of falling interest rates. Speculators can use FRAs to make bets on future changes in interest rates.Rates in the future will usually be different from the implied rate at the time you entered into a forward-rate-agreement, giving rise to gains or losses on the agreed transaction.What is an FRA?An FRA is an abbreviated term for Forward Rate Agreement
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19 Sept 2026
The Best and Worst Wall Street Films!
Ad: 🔒Remove your personal information from the web at https://joindeleteme.com/BOYLE and use code BOYLE for 20% off🙌🏻 DeleteMe international Plans: https://international.joindeleteme.comPatrick Boyle, a former Wall Street trader, rates the biggest finance movies like "The Wolf of Wall Street," "The Big Short," "Rogue Trader" and "American Psycho" for realism.Patrick's Books:Statistics For The Trading Floor: https://amzn.to/3eerLA0Derivatives For The Trading Floor: https://amzn.to/3cjsyPFCorporate Finance: https://amzn.to/3fn3rvC Ways To Support The ChannelPatreon: https://www.patreon.com/PatrickBoyleOnFinanceBuy Me a Coffee: https://www.buymeacoffee.com/patrickboyleVisit our website: https://www.onfinance.orgFollow Patrick on Twitter Here: https://bsky.app/profile/pboyle.bsky.socialBusiness Inquiries ➡️ sponsors@onfinance.orgPatrick Boyle On Finance Podcast:Spotify: https://open.spotify.com/show/7uhrWlDvxzy9hLoW0EYf0bApple: https://podcasts.apple.com/us/podcast/patrick-boyle-on-finance/id1547740313Google Podcasts: https://tinyurl.com/62862nveJoin this channel to support making this content:https://www.youtube.com/channel/UCASM0cgfkJxQ1ICmRilfHLw/join
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18 Sept 2026
What are Variance Swaps? Financial Derivatives - Trading Volatility
In todays video we learn about variance swapsThese classes are all based on the book Trading and Pricing Financial Derivatives, available on Amazon at this link. https://amzn.to/2WIoAL0 Check out our website http://www.onfinance.org/Follow Patrick on twitter here: https://twitter.com/PatrickEBoyleWhat is a Variance Swap?A variance swap is a financial derivative used to hedge or speculate on the magnitude of a price movement of an underlying asset. A variance swap is a forward contract with a payoff based on the realized variance of the underlying asset. Variance swaps settle in cash based on the difference between the realized variance and the variance strikeSimilar to a regular swap, one of the two parties involved in the transaction will pay an amount based upon the actual variance of price changes of the underlying asset. The other party will pay a fixed amount, called the strike, specified at the start of the contract. The strike is typically set at the start to make the net present value of the payoff zero.At the end of the contract, the net payoff to the counterparties will be the notional amount multiplied by the difference between the variance and the strike variance, settled in cash. Due to any margin requirements specified in the contract, some payments may occur during the life of the contract should the contract's value move beyond the agreed limits.The variance swap, in mathematical terms, is the arithmetic average of the squared differences from the mean value. The square root of the variance is the standard deviation.A variance swap is a pure-play on an underlying asset's volatility. Options also give an investor the possibility to speculate on an asset's volatility. But, options carry directional risk, and their prices depend on many factors. There are two main classes of users for variance swaps.Speculators use these swaps to speculate on the future level of volatility for an asset.Hedgers use variance swaps to cover short volatility positions.They are similar to volatility swaps, watch my video on those here. https://www.youtube.com/watch?v=qclLj3E5zyk
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