Visual aid 43 - Options
Options
- Options types and Markets
- Call option
- Covered options
- Naked options
- Out-of-the-money
- In-the-money
- Put option
- Long-term equity anticipation security (LEAPS)
Faculty may use the information provided in the reading material for Learning
Unit 6 in order to develop the presentationVisual aid 44 - Option Pricing models
Option pricing models
- Assumption
- Range of values
- Range of pay offs
- Risk less hedged investment.
- Pricing the call option.
Faculty may use the information provided in the reading material for Learning
Unit 6 in order to develop the presentationVisual aid 45 - Black-Scholes OPM
Black-Scholes option pricing model (OPM)
- Stock price
- Exercise price
- Option life
- Risk-free rate
- Stock price variance
Faculty may use the information provided in the reading material for Learning
Unit 6 in order to develop the presentation