Pricing and Valuation of Options (2024 Level I CFA® Exam - Derivatives - Module 8)
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- čas přidán 7. 07. 2024
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Topic 7 - Derivatives
Module 8 - Pricing and Valuation of Options
LOS : Explain the exercise value, moneyness, and time value of an option.
LOS : Contrast the use of arbitrage and replication concepts in pricing forward commitments and contingent claims.
LOS : Identify the factors that determine the value of an option and describe how each factor affects the value of an option.
27:17 I guess, there is a mistake, coz in the module it is written that the upper bound for a put option price is The PV of Exercise price, not the exercise price itself.
Option Replication Using Put-Call Parity, sir when you next module video come i am eagerly awating to learn from you.
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@@analystprep yes sir
Still not grasping the replication of a put option. I guess I need to see numbers with a diagram drawing to get it.
why the put option is out of the money when I have a right to sell at 100 (X), when in Stock market it is trading for. 102(Stock price)?
I am not getting the concept behind this. Kindly explain.
In case of a put option, you benefit when the price of the underlying stock decreases and similarly lose when the price increases. In your case the stock price has gone upto 102, making the option out of money. If the price of the underlying came down to 95 lets say, then the put option will be in the money, because your exercise price is 100.