Options Korrein Volders, Eckhart Vlaming, Ranford Paulina.

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Presentation transcript:

Options Korrein Volders, Eckhart Vlaming, Ranford Paulina

 How big is the worldwide derivative market?  A. $80 billion  B. $800 billion  C. $8 trillion  D. $80 trillion  NL GDP: €600 billion (600,000,000,000)  US GDP: $17 trillion (17,000,000,000,000) 2

 ANSWER D!  The OTC market is even larger 3

 What are options  Pricing  Using options in practice  Option strategies ◦ Covered call ◦ Bull/Bear Spread ◦ Straddle ◦ Butterfly 4

 Right, but not obligation, to buy or sell  For a specific price  At a pre-defined price  At a pre-defined date  A specified amount 5

 Call - right to buy an asset  Put - right to sell an asset  A specific price: the premium  Pre-defined price: The strike price  Pre-defined date: expiration date ◦ usually the 3rd Friday of the month  Amount: regular size is 100 per contract 6

7  LongWrite (Short)

8

9

10

11 10 DecemberAcademy Options Christmas Social Drink 5 JanuaryOption Workgroup 7 JanuaryAcademy Fundamental 2 Christmas Dinner 14 JanuaryAcademy Social Drink 26 JanuaryAdvanced Academy Think ETF

 *use excel 12

 Buy 100  Write 100 call  (1 contract)  You receive the premium! Goal: improving profit for small stock movements 13

 Buy 1 call 32  Write 1 call 34  Goal: invest in a minor increase /decrease of a stock. 14

 Buy 1 call 26  Buy 1 put 26  Goal: invest in a large stock movement 15

Goal: invest in a specific stock price range Buy 1 call 30 Sell 2 calls 33 Buy 1 call 36 16

Merry christmas 17

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