In: Finance
Propose an example of each and:
a) Make the graphs, and tabulate the payment of an option contract: (call)
b) Make the graphs, and tabulate the payment of an option contract: (put)
Call Option
Value of Call Option = If strike price < Market price then Profit = Market Price - Strike price - Premium Paid, else -Premium Paid
Let Strike Price = 100, Premium Paid = 10, then
Value of Put Option = If strike price > Market price then Strike price - Market Price - Premium Paid, else -Premium Paid