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Click to edit Master subtitle style 5/10/10 Options Markets: Introduction CHAPTER 20
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5/10/10 Buy - Long Sell - Short Call Put Key Elements Exercise or Strike Price Premium or Price Maturity or Expiration Option Terminology
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5/10/10 In the Money - exercise of the option would be profitable Call: market price>exercise price Put: exercise price>market price Out of the Money - exercise of the option would not be profitable Call: market price<exercise price Put: exercise price<market price At the Money - exercise price and asset price are equal Market and Exercise Price Relationships
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5/10/10 American - the option can be exercised at any time before expiration or maturity European - the option can only be exercised on the expiration or maturity date American vs. European Options
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5/10/10 Stock Options Index Options Futures Options Foreign Currency Options Interest Rate Options Different Types of Options
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5/10/10 Notation Stock Price = ST Exercise Price = X Payoff to Call Holder (ST - X) if ST >X 0 if ST < X Profit to Call Holder Payoff - Purchase Price Payoffs and Profits at Expiration - Calls
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5/10/10 Payoff to Call Writer - (ST - X) if ST >X 0 if ST < X Profit to Call Writer Payoff + Premium Payoffs and Profits at Expiration - Calls
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5/10/10 Figure 20.2 Payoff and Profit to Call Option at Expiration
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5/10/10 Figure 20.3 Payoff and Profit to Call Writers at Expiration
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This note was uploaded on 05/08/2010 for the course FIN 3826 taught by Professor Staff during the Spring '08 term at LSU.

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Options - CHAPTER 20 Click to edit Master subtitle style...

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