Option_(1) - put seller Market and Exercise Price In the...

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Click to edit Master subtitle style 5/30/11 Presented by Group-VIII OPTIONS 11
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5/30/11 OPTIONS an option is a derivative financial instrument that establishes a contract between two parties concerning the buying or selling of an asset at a reference price. Call buyer Call  seller Has right but no obligation to buy <------------------------------------------------ Seller is obliged to sell to Buyer if exercised Put  buyer Put  Seller Has right but no obligation to Sell <-------------------------------------------------- Seller is obliged to buy if exercised by
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Unformatted text preview: put seller 5/30/11 Market and Exercise Price 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 5/30/11 PAYOFFs FROM OPTIONS K = Strike price, ST = Price of asset at maturity Payoff S T K Payoff Payoff S T K S T K S T K Payoff LONG Option writer CALL PUT 5/30/11...
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Option_(1) - put seller Market and Exercise Price In the...

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