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Outline Definition Typesof derivatives Participants in the derivatives world Uses of derivatives1Definition Calculus? Financial asset that derives its value from the volatility of the underlying asset price. "What many critics of equit
Chapter 2Basic Principles of Stock Options1 2004 South-Western PublishingOutline Whatoptions are and where they comefrom Why options are a good idea Where and how options trade Components of the option premium Where profits and losse
Chapter 3Basic Option Strategies: Covered Calls and Protective Puts1 2004 South-Western PublishingUsing Options as A Hedge Protectiveputs Using calls to hedge a short position Writing covered calls to protect against market downturns2
Chapter 5Option Pricing1 2004 South-Western PublishingOutline Introduction Abrief history of options pricing Arbitrage and option pricing Intuition into Black-Scholes2Introduction Optionpricing developments are among the most impo
Chapter 6The Black-Scholes Option Pricing Model1 2004 South-Western PublishingOutline Introduction TheBlack-Scholes option pricing model Calculating Black-Scholes prices from historical data Implied volatility Using Black-Scholes to sol
Chapter 8Fundamentals of the Futures Market1 2004 South-Western PublishingOutline Theconcept of futures contracts Market mechanics Market participants The clearing process Principles of futures contract pricing Spreading with commodit
Chapter 9Stock Index Futures1 2004 South-Western PublishingOutline Stockindexes and their futures contracts Uses of stock index futures Hedging with stock index futures2Capitalization-Weighted Indexes TheS&P 500 index is capitali