Professional Documents
Culture Documents
options
Meaning of hedging
options
options
Put options
Call options
Meaning of options
Options
it gives the buyer the right but it is not an obligation to
buy or sell stock / currency /camodity of the specified
amount at a specified period of time.
Types of options
Option
types
Buyer of
option
Call option
Right to buy
asset
Writer of
option
(seller of
option)
Obligation to
sell asset
Put option
Right to sell
asset
Obligation to
buy asset
Covered call
Married put
Protective put
Collar
Long straddle
Long call
Example:
Covered call
Covered call
Covered call
Married put
Married put
Example:
Protective put
It is a hedging stretegy.
Protective put
Protective put
Collar
Collar
Long call
Long call
Long straddle
Long straddle