7.1 Mechanics of Options markets Chapter 7 Options, Futures, and other Derivatives, 5th edition 2002 by John C. Hull
Options, Futures, and Other Derivatives, 5th edition © 2002 by John C. Hull 7.1 Mechanics of Options Markets Chapter 7
72 Types of Options A call is an option to buy A put is an option to sell A European option can be exercised only at the end of its life An American option can be exercised at any time Options, Futures, and other Derivatives, 5th edition 2002 by John C. Hull
Options, Futures, and Other Derivatives, 5th edition © 2002 by John C. Hull 7.2 Types of Options • A call is an option to buy • A put is an option to sell • A European option can be exercised only at the end of its life • An American option can be exercised at any time
73 Assets Underlying Exchange-Traded options Page151-152 Stocks Foreign Currency · Stock| dices Futures Options, Futures, and other Derivatives, 5th edition 2002 by John C. Hull
Options, Futures, and Other Derivatives, 5th edition © 2002 by John C. Hull 7.3 Assets Underlying Exchange-Traded Options Page 151-152 • Stocks • Foreign Currency • Stock Indices • Futures
74 Specification of Exchange-Traded Options Expiration date Strike price European or American Call or Put(option class) Options, Futures, and other Derivatives, 5th edition 2002 by John C. Hull
Options, Futures, and Other Derivatives, 5th edition © 2002 by John C. Hull 7.4 Specification of Exchange-Traded Options • Expiration date • Strike price • European or American • Call or Put (option class)
7.5 Terminology Moneyness At-the- money option In-the- money option Out-of-the-money option Options, Futures, and other Derivatives, 5th edition 2002 by John C. Hull
Options, Futures, and Other Derivatives, 5th edition © 2002 by John C. Hull 7.5 Terminology Moneyness : –At-the-money option –In-the-money option –Out-of-the-money option