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1Options on different assets (Ch. 16 & Ch. 17)Index optionsExtension of results for European options on non-dividend-paying stock to European options on a FINS 3635Week 11 - Options on different assets1stock paying a known dividend yieldPortfolio insurance Currency options Futures optionsExotic Options (Ch. 24: different types of exotic options)Options on Stock IndicesIndex options began trading in the U.S. on March 11, 1983. The first was the S&P 100 options on CBOT which are American options, while the options on S&P 500 Index (CBOT) are EuropeanFINS 3635Week 11 - Options on different assets2on S&P 500 Index (CBOT) are European.Options on smaller portfolios of stocks concentrated in certain sectors have also been introduced such as options on an oil index (a portfolio of energy stocks), a utility index, a gold & silver Index, and a technology index. Index OptionsThe index options are settled in cash rather than by delivering the securities underlying the index. This means that upon exercise of the option, the holder of a call option receives S X in cash and the writer ofFINS 3635Week 11 - Options on different assets3of a call option receives S-X in cash and the writer of the call pays this amount in cash. Similarly, the holder of a put option receives X-S in cash and the writer of the option pays this amount in cash.
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