Posted by R. MAK. on September 2, 2009 ·
A covered call is referred to as that financial market transaction in which the corresponding amount of the underlying instrument is owned by the seller of call options, such as shares of a stock or other securities. The strategy is often referred to as a “buy-write” strategy, if the trader buys the underlying instrument at the same time as he…
Posted by R. MAK. on September 1, 2009 ·
A collar is a name given to an investment strategy that uses options in order to limit the range of possible positive or negative returns on an investment in an asset to a specific range. For having this done, an investor by whom an asset is owned simultaneously buys a put option and sells (writes) a call option on the same asset. It is needed that…
Posted by R. MAK. on August 12, 2009 ·
Here in this article I have explained the put option by giving you an example of the put option.It is believed by a buyer that price of a stock will decrease. He will pay a premium which he will never get back, unless…
Posted by R. MAK. on August 12, 2009 ·
A put option which is sometimes simply call as put is a name given to a financial contract between two parties, the seller (writer) and the buyer of the option. a short position has been acquired by the buyer and it is there right, but not obligation, to sell the underlying instrument at an agreed-upon price (the strike price). If the right has been exercised by…
Posted by R. MAK. on August 11, 2009 ·
In finance, a general term that is used to denote the class into which the option falls is the style or family of an option. It is usually defined by the dates on which the option may be exercised. The vast majority of options are either European or American (style) options. These options as well as others where the payoff is calculated similarly are known as “vanilla options”. Options where the payoff is calculated differently are referred to as “exotic options”. Challenging problems in valuation and hedging can…
Posted by R. MAK. on August 8, 2009 ·
In finance, an OTC-traded financial instrument that facilitates an option to buy or sell a particular bond at a certain date for a particular price is referred to as bond option. It is identical to a stock option having only one difference and that is the underlying asset is a bond. Black model is used to…
