Cosa sono le stock options
Give yourself some in-the-money academic and professional options by understanding: The basics of option contracts and how to obtain price quotes. The difference between option payoffs and option profits. While downloading, if for some reason you are not able to download a presentation, sono publisher may have deleted the file from their server. In this chapter, we will discuss options features of options, but will focus on options on individual common stocks. We will see the tremendous options that options offer investors in designing investment strategies. Listed option contracts are standardized to facilitate trading and price reporting. Listed stock options give the option holder the right to buy or sell shares of stock. Option contracts are legal agreements between two parties—the buyer of the option, and the seller of the option. Stock options trade at organized options exchanges, such as the CBOE, as well as over-the-counter OTC options markets. A list of available option contracts and their prices for a particular security is known as an option chain. Option chains are available online through many sources, including the CBOE http: A letter to identify stock expiration month as well as whether the option is a call or a put. A through L for calls; M through X for puts. A letter to identify the strike price a options more complicated—see Yahoo or Stock-Trak for tables to explain this letter. The Options Clearing Corporation OCC is a private agency that guarantees that the terms of an option contract will be fulfilled if the option is exercised. Note that the exchanges and the OCC are all subject to regulation by the Securities and Exchange Commission SEC. A basic question asked by investors is: To answer this question, we compare the possible outcomes from these two investment strategies:. Whether one strategy is preferred over another is a matter for each individual investor to decide. That is, in some instances investing in the underlying stock will be better. In other instances, investing in the option will be better. It is important to see that call options offer an alternative means sono formulating investment strategies. Because the actual delivery of all stocks comprising a stock index is impractical, stock index options have a cash settlement procedure. That is, if the option expires in the money, the option writer simply pays the option holder the intrinsic value of the option. The writer of a call option contract cosa sell the underlying asset to the call option holder. The call option holderhastherightto exercise the call option i. The writer of a put option contract isobligated to buy the underlying asset from the put option cosa. The put option holder hastherightto exercisethe put option i. Because option writing obligates the option writer, the option writer receives the price of the option today from the option buyer. If this right is only available at the option expiration date, the option is said to have European-styleexercise. If this right stock available at any time up to and including the option expiration date, the option is said to have American-styleexercise. Exercise style is not linked to where the option trades. European-styleand American-styleoptions trade in the U. Option holders also have the right to sell their option at any time. That sono, they do not have to exercise the option if they no longer want it. The terminal cash flow can be realized by the option holder by exercising the option. The intrinsic value of an option is the payoff that an option holder receives if the underlying stock price does not change from its current value. The call option intrinsic value is the maximum of zero or the stock price minus the strike price. The put option intrinsic value is the maximum of zero or the strike price minus the stock price. Think about what would happen if arbitrage were allowed to persist. Easy money for everybody. Note you have zero cash outlay. So, we see that if the put option price equals the strike price, there is an arbitrage. There will be an arbitrage if price of the put, plus the interest you could earn over the life of the option, is greater than the stock price. The maximum price for a European put option is the present value of the strike price computed at the risk-free rate. Therefore, we cannot use the arbitrage strategies to set lower bounds for American options. The lower bound for a European put option price is lessthan its intrinsic value. In fact, in-the-money European puts will frequently sell for less than their intrinsic value. Using an arbitrage strategy that accounts for the fact that European put options cannot be exercised before expiration:. If two securities have the same risk-less pay-off in the future, they must sell for the same price today. That is, to prevent arbitrage: Browse Recent Presentations Presentation Topics Presentation Channels Featured Presentations. Presentation Creator new Upload Login. Home Users Business Fashion Health Science News More Topics. Email Presentation to Friend. Create Presentation Download Presentation. By lorie Follow User. Description Statistics Report Copyright Complaint Adult Content Flag as Inappropriate. Learning Objectives Give yourself some in-the-money academic and professional options by understanding: The workings of some basic option trading strategies. The logic behind the put-call parity condition. Stock Options In this chapter, we will discuss general features of options, but will focus on options on individual common stocks. There stock two basic option types. Call options are options to buy the underlying asset. Put options are options to sell the underlying asset. The minimum terms stipulated by stock option contracts are: The identity of the underlying stock. The strike price, or exercise price. The option contract size. The option expiration date, or option maturity. The option exercise style American or European. The delivery, or settlement, procedure. Listed Option Quotations www. Option Price Quotes A list of available option contracts and their prices for a particular security is known as an option chain. Stock option ticker symbols include: Letters to identify the underlying stock. Stock Option Ticker Symbol and Strike Price Codes. Listed Option Quotes at Yahoo! The Options Clearing Corporation The Options Clearing Corporation OCC is a private agency that guarantees that the terms of an option contract will be fulfilled if the option is exercised. The OCC issues and clears all option contracts trading on U. Visit the OCC at: Buy the underlying stock. Buy options on the underlying stock. Investment for shares: Buying the Underlying Stock versus Buying a Call Option, Cont. Conclusion Whether one strategy is preferred over another is a matter for each individual investor to decide. Each investor must weight the risk and return trade-off offered by the strategies. For shares, the dollar loss potential with call options is lower. For shares, the dollar gain potential with call options is lower. The positive percentage return with call options is higher. The negative percentage return with call options is lower. Stock Index Options A stock index option is an option on a stock market index. The cash settlement procedure is the same for calls and puts. Index Option Trading, Part One. Index Option Trading, Part Two. An option that would NOT yield a positive payoff if exercised Use the relationship between S the stock price and K the strike price: Option Writing The act of selling an option is referred to as option writing. The seller of an option contract is called thewriter. Option Exercise Option holders have the right to exercise their option. Option Payoffs versus Option Profits Option investment strategies involve initial and terminal cash flows. Using Options to Manage Risk, I. Protective put - Strategy of buying put options to protect against falling values. Using Options to Manage Risk, II. Protective call- Strategy of buying call options to protect cosa rising prices. The Three Types of Option Trading Strategies Type I: Traders add an option position to their stock position. These strategies help traders modify their stock risk. Covered Calls Selling a call option on a stock already owned. A position with two or more options of the same type i. Three option positions using: Buy one call option with the lowest strike. Buy one call option with the highest strike. Sell two call options with the middle strike. A position in a mixture of call and put options. Straddle buy one call and one put with the same strike and expiration. There are many option trading strategies. Option Intrinsic Values The intrinsic value of an option is the payoff that an option holder receives if the underlying stock price does not change from its current value. That is, if S is the current stock price, and K is the strike price of the option: For calls, the strike sono is less than the stock price. For puts, the strike price is greater than the stock price. For calls, the strike price is greater than the stock price. For puts, the strike price is less than the stock price. Arbitrage and Option Pricing Bounds Arbitrage: No possibility of a loss A potential for a gain No cash outlay In finance, arbitrage is not allowed to persist. The Upper Bound for a Call Option Price Call option price must be less than the stock price. Otherwise, arbitrage will be possible. Zero cash outlay today, no possibility of loss, and potential for gain. The Upper Bound for European Put Option Prices, I. European put option price must be less than the strike price. Stock price goes to zero. The put expires with zero value and you are off the hook. The Upper Bound for European Put Option Prices, II. For example, suppose the risk-free rate is 3 percent per quarter. What is the maximum put value that does not result in an arbitrage? The Lower Bound on Option Prices Option prices must be at least zero. An option holder can simply discard the option. This means that no one would pay someone to take an option off their hands. Therefore, the price of the option cannot be negative. Can an American call sell for less than its intrinsic value? Therefore, an American call option price is never less than its intrinsic value. The Lower Bound on American Puts Can an American put sell for less than its intrinsic value? Therefore, an American put option price is never less than its intrinsic value. The Lower Bounds for European Options European Calls. European options cannot be exercised before expiration. We must use a different approach which can easily be found. The lower bound for a European call option is greater than its intrinsic value. Using an arbitrage strategy that accounts for the fact that European put options cannot be exercised before expiration: Put-Call Parity Put-Call Parity is perhaps the most fundamental relationship in option pricing. Put-Call Parity cosa generally used for options with European-style exercise. The Put-Call Parity Formula In the formula: C is the call option price today S is the stock price today r is the risk-free interest rate P is the put option price today K is the strike price of the put and the call T is the time remaining until option expiration Note: Why Put-Call Parity Works If two securities have the same risk-less pay-off in the future, they must sell for the same price today. Today, suppose an investor forms the following portfolio: Buys shares of Microsoft stock. Writes one Microsoft call option contract. Buys one Microsoft put option contract. At option expiration, this portfolio will be worth: That is, it is riskless. Useful Websites For information on options ticker symbols, see: Options on Common Stocks Option Basics Option Price Quotes The Options Clearing Corporation Why Options? Using Options to Manage Risk The Three Types of Option Trading Strategies Adding Options to a Stock Position Combinations Spreads Option Intrinsic Values Option Prices, Intrinsic Values, and Arbitrage The Upper Bound for a Call Option Price The Upper Bound for a Put Option Price The Lower Bounds on Option Prices Put-Call Parity. Previous Presentation RADical microarray data: Next Presentation from tycoon. Download Presentation Connecting to Server. About Stock Advertise Terms of Use Privacy Policy Contact Us Blog. All rights reserved Powered By DigitalOfficePro.
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