Chap015 - Chapter 14 Stock Options Slides 14-1 14-2 14-3...

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Chapter 14 Stock Options Slides 14-1 Fundamentals of Investments 14-2 Stock Options 14-3 Option Basics 14-4 Option Basics, Cont. 14-5 Listed Option Quotations 14-6 Option Price Quotes 14-7 Why Options? 14-8 Example: Buying the Underlying Stock versus Buying a Call Option 14-9 Example: Buying the Underlying Stock versus Buying a Call Option, Cont. 14-10 Why Options? Conclusion 14-11 Option Writing 14-12 Option Exercise 14-13 Option Payoffs versus Option Profits 14-14 Call Option Payoffs 14-15 Put Option Payoffs 14-16 Call Option Profits 14-17 Put Option Profits 14-18 Option Strategies 14-19 More Option Trading Strategies 14-20 Arbitrage 14-21 The Upper Bound for a Call Option Price 14-22 The Upper Bound for a Put Option Price 14-23 The Lower Bound on Option Prices 14-24 Option Intrinsic Values 14-25 Option “Moneyness” 14-26 Intrinsic Values and Arbitrage, Calls 14-27 Intrinsic Values and Arbitrage, Puts 14-28 Back to Lower Bounds for Option Prices 14-29 Employee Stock Options, ESOs 14-30 Features of ESOs 14-31 Why are ESOs Granted? 14-32 ESO Repricing 14-33 ESO Repricing Controversy 14-34 ESOs Today 14-35 Put-Call Parity 14-36 The Put-Call Parity Formula 14-37 Why Put-Call Parity Works 14-38 Put-Call Parity Notes
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A-123 Chapter 14 14-39 Stock Index Options 14-40 Index Option Trading 14-41 The Options Clearing Corporation 14-42 Useful Websites 14-43 Chapter Review, I. 14-44 Chapter Review, II. Chapter Organization 14.1 Options on Common Stocks A. Option Basics B. Option Price Quotes 14.2 Why Options? 14.3 Option Payoffs and Profits A. Option Writing B. Option Payoffs C. Payoff Diagrams D. Option Profits 14.4 Option Strategies A. The Protective Put Strategy B. The Covered Call Strategy C. Straddles 14.5 Option Prices, Intrinsic Values, and Arbitrage A. The Upper Bound for a Call Option Price B. The Upper Bound for a Put Option Price C. The Lower Bounds on Option Prices 14.6 Employee Stock Options (ESOs) A. ESO Features B. ESO Repricing 14.7 Put-Call Parity 14.8 Stock Index Options A. Index Options: Features and Settlement B. Index Option Price Quotes 14.9 The Option Clearing Corporation 14.10 Summary and Conclusions
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Stock Options A-124 Selected Web Sites Option Exchanges: www.cboe.com www.amex.com www.phlx.com www.nyse.com www.pacificex.com www.optionsites.com (for information on option tickers) www.optionscentral.com (for option education information) To Learn More About Options: www.e-analytics.com www.tradingmarkets.com http://www.investorlinks.com www.commodityworld.com (for information on trading strategies) www.writecall.com (for more on covered calls) www.giscor.com (for more on covered calls) www.ino.com (for information on trading options) www.optionetics.com (to learn more about trading options) Exchanges that trade index options include: www.cboe.com www.cbot.com www.cme.com www.optionsclearing.com (visit the OCC’s website) Annotated Chapter Outline
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Chap015 - Chapter 14 Stock Options Slides 14-1 14-2 14-3...

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