What are listed options, and how do they differ from conventional options?
Answer to relevant QuestionsWhat are the main investment attractions of put and call options? What are the risks? How do you find the intrinsic (fundamental) value of a call? Of a put? Does an out-of-the- money option have intrinsic value? Angelo Martino just purchased 500 shares of AT&E at $61.50, and he has decided to write covered calls against these stocks. Accordingly, he sells five AT&E calls at their current market price of $5.75. The calls have 3 ...Refer to the table for XLB in Problem 14.6. What happens if you are wrong and the price of XLB increases to $25 on the expiration date? What are futures options? Explain how they can be used by speculators. Why would an investor want to use an option on an interest-rate futures contract rather than the futures contract itself?
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