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19 Cards in this Set
- Front
- Back
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who regulates options trading?
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option clearing corp
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where are they traded?
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chicago bd. options exchange (1973)
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when do they expire?
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third friday of the month
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what does the premium reflect?
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IV + TV
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(call) intrinsic value = ???
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stock price - exercise price
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time value = ???
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premium - intrinsic value
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(put) intrinsic value
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exercise price - stock price
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call: buy
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capital gain
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call: sell
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income, hedge
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put: buy
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hedge
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put: sell
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income, bargain purchase
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break even point
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depends on premium paid for call/put options on top of exercise price
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buy stock, sell a put
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hedge
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sell short, buy a call
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hedge
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buy may 40, sell may 45
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vertical spread
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buy june 40, sell may 40
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time/calendar spread
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index option value
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100 times index value in cash
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leaps options
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up to 2 yrs
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black-scholes option pricing model
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stock price, exercise price, time remaining, r free rate, variability
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