Return on Options, Put Call Parity
About the Lecture
The lecture Return on Options, Put Call Parity by Edu Pristine is from the course Archiv - Financial Markets and Products. It contains the following chapters:
- Returns to Option Sellers
- Returns to Option Buyers
- Put Call Parity
- Bounds and Option Values
Author of lecture Return on Options, Put Call Parity
Edu Pristine
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Excerpts from the accompanying material
... exercised, the option writer makes profi t from the premium. -If the option is exercised, the option writer may make profit or loss depending on the spot price of the underlying asset at the time. Example: A Call option writer gets premium of 1 for an option with ...
... a trader who has: -A Put Option with a Strike Price of 5 and -An equivalent unit of the underlying asset ...
... for European options, purchasing a put option on ABC stock will be equivalent to A. Buying a call, buying ABC stock and buying a ...
... This holds true for American options only if they are not exercised early. In case of dividend-paying stocks, either the amount of dividend paid should be known in advance or it is assumed that the strike price factors the future dividend payment. The mathematical representation of Put Call Parity is: = Initial stock price (S) + ...
... Consider a 1-year European call option with a strike price of $27.50 that is currently ...
... -For options that still have some time to run, the heavy lower line is thus the lower-bound limit on the market price of the option. -The diagonal line in the plot is the upper bound limit to the option price, because the ...
... illustration of the call, If at the option’s expiration, stock price > exercise price,the option is worth the stock price minus the exercise price, If the stock price < exercise price, the option is ...
... call option is written on a dividend paying stock, an increase in which of the ...
... Stock price long call payoff ...
... Expiration Call, Pay-Off, Strike Price, Bond Value at Maturity Bond ...
... of a trader who has: A Put Option with a Strike Price of 5 and an equivalent unit of the underlying ...
... for European options, purchasing a put option on ABC stock will be equivalent to A) Buying a call, buying ABC stock and buying a ...
... This holds true for American options only if they are not exercised early In case of dividend-paying stocks, either the amount of dividend paid should be known in advance or it is assumed that the strike price factors the future dividend payment The mathematical representation of Put Call Parity is: Initial stock price (S) + Put ...
... Consider a 1-year European call option with a strike price of $27.50 that is currently ...
... price is below 5 on the exercise date, the call will be worthless. If the stock price is above 5, the call will be worth 5 less than the value of the stock. Even before maturity of the option, its value can never remain below ...
... But the share owners still have a valuable financial asset in the form of stock of ABC Corporation. The value of the option would lie between these two bounds throughout the option’s ...
... not automatically result in an increased option price: A) The stock price B) The risk-free rate ...
