衍生物和选择（英）.pdf

Derivatives Options Historical Topics (Internal to the Corp) 1 - Capital Budgeting (Investment) 2 - Capital Structure (Financing) Today • We are leaving Internal Corporate Finance • We are going to Wall St “Capital Markets” • Options - financial and corporate • Options are a type of derivative Options Terminology Derivatives - Any financial instrument that is derived from another. (e.g.. options, warrants, futures, swaps, etc.) Option - Gives the holder the right to buy or sell a security at a specified price during a specified period of time. Call Option - The right to buy a security at a specified price within a specified time. Put Option - The right to sell a security at a specified price within a specified time. Option Premium - The price paid for the option, above the price of the underlying security. Intrinsic Value - Diff between the strike price and the stock price Time Premium - Value of option above the intrinsic value Options Terminology Exercise Price - (Striking Price) The price at which you buy or sell the security. Expiration Date - The last date on which the option can be exercised. American Option - Can be exercised at any time prior to and including the expiration date. European Option - Can be exercised only on the expiration date. All options “usually” act like European options because you make more money if you sell the option before expiration (vs. exercising it). 3 vs. 70-68=2 Option Obligations Buyer Seller Call option Right to buy asset Obligation to sell asset Put option Right to sell asset Obligation to buy asset Option Value The value of an option at expiration is a function of the stock price and the exercise price.