payoff for put option buyer and seller?

Q: Explain how the possible profit and loss possibilities arise for an individual who invests in a:…

A: Call options are financial derivative instrument which gives the buyer of the contract the right but…

Q: What is Lump-sum cash-value option?

A: The option is the contract with two or more options for the financial instrument. The lump-sum cash…

Q: option

A: Call options are those options which gives the right but not the obligation to the buyer to purchase…

Q: Describe about the Option-pricing models?

A: The option pricing model utilizes factors (stock value, exercise price, volatility, interest rate,…

Q: Describe Option-Pricing Theory.

A: Option pricing theory is a technique used to calculate the fair value of an option by using…

Q: What effect does Time expiration have on call option price?

A: Time to Expiration in derivatives is the last day that the options or futures are valid. On or…

Q: Share option compensation is what accounting subject?

A: Stock-based compensation: It is a way of paying employees, executives, and directors of a company…

Q: What impact does each of the followingparameters have on the value of a call option?(3) Option’s…

A: It is a contract to purchase a financial asset from one party and sell it to another party on an…

Q: What is in-the-money option?

A: Option is a financial instrument that gives the right to buy/sell an underlying in future date at a…

Q: What are the five variables that affect the value of an option, and how do changes in each of these…

A: Option price refers to the price at which buyers purchase the stock or have the right to buy or sell…

Q: Discuss how equity can be viewed as an option. Who has theoption, and what decision can they make?

A: If an enterprise cannot satisfy its contractual obligation of debt, it is in default for every…

Q: What is a futures contract? What are the key differences between forward andfutures contracts?

A: Futures Contract are the Promises made between two parties on the platform called exchange for the…

Q: Explain Price Return Swap?

A: A derivative contract which enables two parties to exchange financial instruments, cash flows,…

Q: What is margin requirement (for futures)?

A: Solution:- A Margin Requirement is the share of marginable securities that an investor should pay…

Q: a. Name of options payoff b. identify whether positive or negative premium c. identify breakeven…

A: Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first…

Q: Explain the following terms, In-the money option and At-the-money option.

A:

Q: Define Black-Scholes option pricing model

A: Assumptions of Black-Scholes option pricing models: There is no dividend during the lifetime of the…

Q: What is a futures contract?

A: Derivatives: Derivatives are some financial instruments which are meant for managing risk and…

Q: How does a futures contract differ from a forward contract?

A: Derivatives: A derivative is defined as a financial instrument whose value is derived from the value…

Q: t is payoff to put option holder on expiry?

A: A put option is an instrument which provides its holder an option to sell an underlying asset on a…

Q: What is out-of-the money option?

A: Out of money options are generally preferable for the investors. This is because they are more…

Q: The strike price of an option is: Answer a. The market price at the time the option is exercised b.…

A: Option has Strike Price, which is also known as Exercise Price.

Q: is payoff to call option buyer or h

A: A call option is an instrument which provides its holder an option to buy an underlying asset on a…

Q: What is a difference between Futures Contract and Forwards Contract?

A: Forward contract: This is an agreement between two parties to trade on a asset at a specified price…

Q: Options have a unique set of terminology. Definethe following terms:(3) Strike price or exercise…

A: Option: An option is a special type of contract which gives its holder the right but not obligation…

Q: What is the buy option?

A: A buy option involves two types which are : Buy call option Buy put option

Q: to put option buyer or hol

A: A put option is an instrument which provides its holder an option to sell an underlying asset on a…

Q: Determine, generally based on justification, in what manner does seller a put option set targeted?

A: Put options offer option holders the right, but not really the responsibility, to sell a…

Q: i) Differentiate between “in the money”, “out the money” and “at the money” positions in a put…

A: Put option A put option is said because the contract which provides the holders or the owner the…

Q: What is the purpose of the Black–Scholes Option Pricing Model?

A: Black-Scholes is a pricing model used to determine the fair price or theoretical value for a call or…

Q: ption? What is payoff to call optio

A: A call option is an instrument which provides its holder an option to buy an underlying asset on a…

Q: The price level you choose for price protection on a call option is referred to as: A. The strike…

A: Call Option is taken when it is expected that price will rise in the future. It is exercised when…

Q: When should you long (buy) a call option and when should you long (buy) a put?

A: Investors buy call options when they expect a stock's price to climb. Purchasing a call option…