Chapter_20UnderstandingOptions(公司金融,英文版)..ppt

Slides by Matthew Will Topics Covered Calls, Puts and Shares Financial Alchemy with Options What Determines Option Value Option Valuation Option Terminology Put Option Right to sell an asset at a specified exercise price on or before the exercise date. Option Obligations Option Value The value of an option at expiration is a function of the stock price and the exercise price. Option Value The value of an option at expiration is a function of the stock price and the exercise price. Example - Option values given a exercise price of $55 Option Value Option Value Option Value Option Value Option Value Protective Put - Long stock and long put Option Value Protective Put - Long stock and long put Option Value Protective Put - Long stock and long put Option Value Protective Put - Long stock and long put Option Value Straddle - Long call and long put - Strategy for profiting from high volatility Option Value Straddle - Long call and long put - Strategy for profiting from high volatility Option Value Straddle - Long call and long put - Strategy for profiting from high volatility Option Value Straddle - Long call and long put - Strategy for profiting from high volatility Option Value Option Value 14 15 16 20- * McGraw Hill/Irwin Copyright ? 2003 by The McGraw-Hill Companies, Inc. All rights reserved Understanding Options Principles of Corporate Finance Seventh Edition Richard A. Brealey Stewart C. Myers Chapter 20 McGraw Hill/Irwin Copyright ? 2003 by The McGraw-Hill Companies, Inc. All rights reserved Call Option Right to buy an asset at a specified exercise price on or before the exercise date. Call option value (graphic) given a $55 exercise price. Share Price Call option value 55 75 $20 Put option value (graphic) given a $55 exercise price. Share Price Put option value 50 55 $5 Call option payoff (to seller) given a $55 exercise price. Share Price Call option $ payoff 55 Put option payoff (to seller) given a $55 exercise price. Share Pri