COMMERCE 3FA3 Chapter Notes - Chapter 25: Call Option, Put Option, Option Style
10 Feb 2018
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Option: a contract that gives its owner the right to buy or sell some asset at a fixed price on or before a given date. Exercising the option: the act of buying or selling the underlying asset via the option contract. Striking price or exercise price: the fixed price in the option contract at which the holder can buy or sell the underlying asset. Expiration date: the last day on which an option can be exercised. American options: call or put options that can be exercised on or before the expiration date. European options: options that can be exercised only on the expiration date. Call option: the right to buy an asset at a fixed price during a particular period of time. Put option: the right to sell an asset at a fixed price during a particular period of time. The upper and lower bounds on a call option"s value.
