OPTIONS AS FORMS OF DERIVATIVE INSTRUMENTS

Options as Forms of Derivative Instruments



Options as Forms of Derivative Instruments

The options are basically of two types. A call option gives the option buyer the right but not the obligation to buy an asset from the option writer at a specific date for a specified price, known as the exercise price. Since a call choice is the "right but not the obligation to purchase an asset, it is obvious that the choice be workoutd only if the workout cost is below the going market price for the underlying asset at that specific time in the ...