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    Submitted To: Submitted By: Dr. Rajni Chugh Kanchan Verma Assistant Professor Roll No. 39

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    Anonymous 3H6fFBm
    The document discusses options contracts, defining them as contracts that give the buyer the right but not obligation to buy or sell an asset at a specified price on or before a specified date. It outlines the basic terminology including exercise price, expiration date, and option premium. It describes the main types of options as call options, which give the right to buy, and put options, which give the right to sell. Finally, it briefly mentions the different styles (European and American) and ways to write options (covered and naked).

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    Submitted To: Submitted By: Dr. Rajni Chugh Kanchan Verma Assistant Professor Roll No. 39

    Uploaded by

    Anonymous 3H6fFBm
    43 views8 pages
    The document discusses options contracts, defining them as contracts that give the buyer the right but not obligation to buy or sell an asset at a specified price on or before a specified date. It outlines the basic terminology including exercise price, expiration date, and option premium. It describes the main types of options as call options, which give the right to buy, and put options, which give the right to sell. Finally, it briefly mentions the different styles (European and American) and ways to write options (covered and naked).

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    PPT ON OPTIONS

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    FE

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    The document discusses options contracts, defining them as contracts that give the buyer the right but not obligation to buy or sell an asset at a specified price on or before a specified date. It outlines the basic terminology including exercise price, expiration date, and option premium. It describes the main types of options as call options, which give the right to buy, and put options, which give the right to sell. Finally, it briefly mentions the different styles (European and American) and ways to write options (covered and naked).

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    43 views8 pages

    Submitted To: Submitted By: Dr. Rajni Chugh Kanchan Verma Assistant Professor Roll No. 39

    Uploaded by

    Anonymous 3H6fFBm
    The document discusses options contracts, defining them as contracts that give the buyer the right but not obligation to buy or sell an asset at a specified price on or before a specified date. It outlines the basic terminology including exercise price, expiration date, and option premium. It describes the main types of options as call options, which give the right to buy, and put options, which give the right to sell. Finally, it briefly mentions the different styles (European and American) and ways to write options (covered and naked).

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 8

    SUBMITTED TO: SUBMITTED BY:

    DR. RAJNI CHUGH KANCHAN VERMA


    ASSISTANT PROFESSOR ROLL NO. 39
    OPTIONS:-
     An options is a contract that gives its buyer (holder) a right but not
    obligation to buy or sell a specified asset at a specified price on or
    before a specified future date.

     An options is a contract sold by one party to another party.

     It gives a right to the buyer. The seller has the obligation but no right.

     The buyer and the sellers are not on equal footing.

     The buyer has to pay some price , known as options premium to the
    seller of the option.
    BASIC TERMINOLOGY
    Exercise price :- It is a specified price at which an option can be
    exercised. It is also known as strike price. The exercise price for a call option
    is the price at which the security can be bought (on or before the
    expiration date) and the exercise price for a put option is the price at
    which the security can be sold.

    Expiration Date :- The date, on or before which, the option may be


    exercised is termed as expiration date. Beyond this date the right of the
    options holder ceases to exist.

    Option Premium:- The option holder has to pay some amount known as
    options premium to the option writer for availing the right. It is required
    because the buyer of the options has a right while seller of the options has
    obligations to buy or sell at the specified price.
    TYPES OF OPTIONS
     According to the option rights:-
    1. Call options
    2. Put options

     According to the underlying assets:-


    1. Stock option
    2. Interest Rate option
    3. Index option
    4. Commodity option
    5. Currency option
    CALL OPTIONS
     An options contract that gives its holder the ‘right to buy’ a specified
    asset at a specified price on or before a specified future date.

     A call option is bought when the buyer of the call option fears a rise in
    underlying asset’s price.

     It is exercised when the stock price is greater than the exercise price.

     The holder of the call options can buy the stock or asset at the exercise
    price which is lower than the prevailing market price.
    PUT OPTIONS
     A put option provides a right to sell.

     An option contract that gives its holder the ‘right to sell’ a specified
    future date.

     The seller has the obligation to buy.

     A put option is bought when the buyer of the put option fears a decline
    in underlying asset’s price.

     A put option is exercised when the stock price is lower than the exercise
    price.
    STYLES OF OPTIONS:

    EUROPEAN AMERICAN
    OPTIONS OPTIONS
    WAYS TO WRITE OPTIONS

    Covered Naked
    Option Option

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