When the volatility of the underlying decreases, the value of the option also decreases, meaning that the upper payoff value of the hedge portfolio combining them declines. However, the lower payoff value remains at zero.【释义】最初,看涨期权的行权价与标的资产市场价格相等,二叉树模型假设资产的...
price in case the price of corn declines. This will limit his/her risk: if the price of corn falls, the investor has the option to sell at a high price, and, if the price of corn rises (especially higher than the strike price of the option), then he/she will choose not to ...
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Put on a call: The investor must deliver the underlying call option to the seller and collect a premium based on the strike price of the overlying put option. A put on a call option can be used by an investor to extend their hedge on an underlying asset at a low cost, and it can ...
Options arederivativeinstruments, meaning that their prices are derived from the price of theirunderlying security, which could be almost anything:stocks,bonds, currencies, indexes, commodities, etc. Many options are created in a standardized form and traded on an options exchange like the Chicago Bo...
Options arederivativeinstruments, meaning that their prices are derived from the price of theirunderlying security, which could be almost anything:stocks,bonds, currencies, indexes, commodities, etc. Many options are created in a standardized form and traded on an options exchange like the Chicago Bo...
If the option is “in-the-money” prior to expiration – meaning the underlying stock price has risen to a point above the strike price of the option – then the buyer will profit by the difference between the option strike price and the actual stock price, multiplied by the number of ...
Out of the money is also known as OTM, meaning an option has no intrinsic value, only extrinsic value. A call option is OTM if the underlying price is trading below the strike price of the call. A put option is OTM if the underlying's price is above the put's strike price. ...
(finance) A contract giving the holder the right to buy or sell an asset at a set strike price; can apply to financial market transactions, or to ordinary transactions for tangible assets such as a residence or automobile. To purchase an option on something. noun One of the choices whic...
If the put expires out of the money, meaning that the value of the asset,,is greater than the put’s value at expiration, 0, then the total value of the protective put is,or .A protective put and a fiduciary call produce the same result.【释义】无论标的股票的股价如何变化,这两个组合...