ActSc371_Lecture 23_Chapter 23 cont'd(Ross)

ActSc371_Lecture 23_Chapter 23 cont'd(Ross) - ActSc 371...

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Lecture 23 Sections 23.5 – 23.6: Options and Corporate Finance – Basic Concepts Rules(Corporate Finance by Ross et al.) ActSc 371 – Corporate Finance 1 Instructor: Dr. Lysa Porth 1
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23.5 Stock Option Quotations Exchange trading in options began in 1973 on the Chicago Board Options Exchange (CBOE). Still the largest organized options market, and options are traded in a number of other places today. Option trading in Canada began in 1975. Options are traded on the Montreal Exchange and cleared through the Canadian Derivatives Clearing Corp. (CDCC).
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23.5 Stock Option Quotations This option has a strike price of $8; A recent price for the stock is $9.35 June is the expiration month Stk Exp P/C Vol Bid Ask Opint Nortel Networks (NT) 9.35 9 Mar C 446 0.50 0.55 2461 9 Mar P 155 0.20 0.30 841 8 June C 15 1.95 2.10 660 8 June P 35 0.55 0.65 1310 11 Sept C 11 1.10 1.25 459 11 Sept P 5 2.65 2.80 279
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23.5 Stock Option Quotations This makes a call option with this exercise price in-the-money by $1.35 = $9.35 – $8. Puts with this exercise price are out-of-the-money. Stk Exp P/C Vol Bid Ask Opint Nortel Networks (NT) 9.35 9 Mar C 446 0.50 0.55 2461 9 Mar P 155 0.20 0.30 841 8 June C 15 1.95 2.10 660 8 June P 35 0.55 0.65 1310 11 Sept C 11 1.10 1.25 459 11 Sept P 5 2.65 2.80 279
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23.5 Stock Option Quotations On this day, 15 call options with this exercise price were traded. Stk Exp P/C Vol Bid Ask Opint Nortel Networks (NT) 9.35 9 Mar C 446 0.50 0.55 2461 9 Mar P 155 0.20 0.30 841 8 June C 15 1.95 2.10 660 8 June P 35 0.55 0.65 1310 11 Sept C 11 1.10 1.25 459 11 Sept P 5 2.65 2.80 279
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23.5 Stock Option Quotations The holder of this CALL option can sell it for $1.95.
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This note was uploaded on 12/16/2011 for the course ACSTC 371 taught by Professor Lisaporth during the Fall '11 term at Waterloo.

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ActSc371_Lecture 23_Chapter 23 cont'd(Ross) - ActSc 371...

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