Fundamentals of Options Market
McGraw Hill Professional, Jan 9, 2001 - Business & Economics - 340 pages
Options are an investment vehicle that can enhance virtually any investment philosophy. Fundamentals of the Options Market provides a clear, concise picture of this global marketplace. Using examples drawn from contemporary financial news, this completely accessible guidebook describes why and how these versatile tools can be used to hedge risk and enhance return, while explaining popular products including listed stock options, index options, and LEAPS.
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A Order Types
F The Options Clearing Corporation OCC
G Intrinsic and Premium Formulas
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Page 331 - Put option An option contract that gives the holder the right to sell a specified number of shares of the underlying stock at the given exercise price on or before the option expiration date.
Page 332 - The portion of the premium that is attributable to the amount of time remaining until the option's expiration date and to the fact that the underlying components that determine the value of the option may change during that time.
Page 325 - A commodity option is a unilateral contract giving the purchaser of the option the right, but not the obligation, to buy (in the case of a call) or sell (in the case of a put) an underlying futures contract or physicial commodity at specified price (the strike price) for a specified period of time.
Page 332 - Strike price/exercise price The stated price per share for which the underlying stock may be bought (in the case of a call) or sold (in the case of a put) by the option holder upon exercise of the option contract.
Page 331 - A call option is in-the-money if the exercise price is less than the market price of the underlying security. A put option is in-the-money if the exercise price is greater than the market price of the underlying security.
Page 15 - When an option is exercised, the option writer (seller) is obligated to sell (in the case of a call option) or buy (in the case of a put option...
Page 325 - Derivative A financial security, such as an option, swap or future, whose value is derived in part from the value and characteristics of another underlying security.
Page 331 - A put option is in-the-money if the exercise price is greater than the market price of the underlying security. Out-of-the-money A call option is out-of-the-money if the exercise price is greater than the market price of the underlying security. A put option is out-of-the-money if the strike price is less than the market price of the underlying security.