47 lines
927 B
Plaintext
47 lines
927 B
Plaintext
Cl,opter 15: Put Option Basics
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FIGURE 1 5-1.
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Put option price curve.
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~
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it
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C:
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.Q
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a.
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0
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FIGURE 1 5-2.
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Call option price curve.
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~
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ct
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C:
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0
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11
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10
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9
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8
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7
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6
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a 5
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Striking
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Price (50)
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Greatest
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Value for
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Time Value
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Stock Price
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0 4 ----------------------
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3
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2
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1
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0
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40 45
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represents the option's
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time value premium. ________ L ________ _
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50\ 55 60 Stock Price Intrinsic value
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remains at zero
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until striking price
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is passed.
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249
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price by the amount of the dividend. That is, the stock will decrease in price and
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therefore the put will become more valuable. Consequently, the buyer of the put will
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be willing to pay a higher price for the put and the seller of the put will also demand
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a higher price. As with listed calls, listed puts are not adjusted for the payment of cash
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dividends on the underlying stock. However, the price of the option itself will reflect
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the dividend payments on the stock. |