Unit
5: Introduction to Options European options:
European
options are options that can be exercised only on the expiration Notes date
itself.
Expiration
date: The date specified in the options contract is known as the expiration
date, the exercise date, the strike date or the maturity.
Index
derivatives: Index derivatives are derivative contracts which derive their
value from an underlying index.
Option
Premium: The “price” an option buyer pays and an option writer receives is
known as the premium.
Option:
An option is a contract that gives the buyer the right, but not the obligation,
to buy or sell an underlying asset at a specific price on or before a certain
date.
Put
option: A put option gives the holder the right but not the obligation to sell
an asset by a certain date for a certain price.
