The options Created by: Magdolenová Jana Ondrovičová Matilda

Content:  History  Option  Option contracts  Option strategies

History 1773 – Barnard´s law – option contracts are out of law 1860 – deletion of this law 1973 – the boom of option contracts, the creation of Chicago Board Exchange 1975 – the creation of America Stock Exchange and Philadelphia and next year also the boom of option contracts in Toronto, Montreal and Vancouver 1977 – the deletion of previous restrictions 1978 – the first option contracts and Amsterdam market 1981 – the creation of option contracts and obligation in Amsterdam market 1982 – the creation of option contracts and obligation in Montreal and London, the beginning of trading with option for a foreign currency 90 years – the beginning of trading with option and derivatives

What is the option?

Option terminology  Call option  Put option  Option premium

Option contract - is a written agreement creating the rights and obligations for both sides. One side there is a seller who wants to buy the instruments. On the other side is a buyer who wants to realize an inverse operation, it means, sell these instruments. They negotiate the price, the value of delivery and time of filling.

 European option  American option  Exotic option Types of option contracts

Option strategy 1.Option strategy with a same type of options  bull spread  bear spread  butterfly spread  condor spread  ratio spread  ratio back spread  calendar spread  diagonal spread

Option strategy 2. Option strategy based on the combination of both types of options  straddle  strangle  strap  strip

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