This blog will analyze the Khan Academy Put Call Parity Videos as part of the #MTT2k project.
I have completed a first video using Popcorn Maker.
This is a simple example. The user should drag the time to around 50 to 55 seconds instead of waiting around, if you just want to see the error. Around 55 seconds is when Khan draws the kink and labels it with S, the same as the variable symbol.
The first blog to use Popcorn Maker for Khan videos is Kate Nowak, a high school math teacher.
I had earlier written this blog article before completing the above video. So the rest of it is written with the perspective that the video is to be done in the future.
Others are welcome to do comments on Khan’s put call parity videos, but I will still be adding my take on it.
In particular, I am working on the double use of the symbol S for the strike price and the stock price. Khan also uses S as a subscript in a way that is confusing and contrary to the current convention that subscript S means derivative with respect to the stock price.
Other put call parity videos and webpages and pdfs do a better job than Khan. They use K as a separate letter for the strike price. They use B as a zero coupon bond price with a value of 1 at the maturity of the option T. All the options are European with a common expiration date and common strike price K.
Khan should have seen these as an MBA student at Harvard and at a hedge fund. Not to mention in researching these videos. Thus his inferior choices are strange.
Also as an MIT educated person, Khan should know not to use the same symbol S to mean the input variable of a function and the location of a kink in the function’s graph.
Go to one minute in this video. There are several videos in put call parity in his series.
It is possible to download the Khan videos. I recommend that people download the finance ones so they have a copy prior to any changes. There is a program at Khan to download his videos to your computer.