1. Academy 5 Basic Option Trading Get connected to B&R Beurs @ 1

2.  1. Importance  2. What are options  3. Call vs. Put  4. Shorting options  5. Break  6. Basic strategies  7. Cases 2

3.  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: $14 trillion (14,000,000,000,000) 3

4.  Banks and institutional investors  Size: $ 600 trillion (600,000,000,000,000,000)  (600.000 miljard in dutch) 4

5.  Right to buy or sell  Stocks, indices, currencies  Specific expiration date  Specific price  European and American options  In Europe we trade American options 5

6.  Call Right to Buy  Put Right to sell  Traded in contracts  Regulair sized 100 6

7.  Writing options  Selling an option you don’t own  Obligation to buy or sell  Margin  Covered short selling  Premium 7

8. 8 Underlying value Time valueOther  Current stock price-strike price  The longer away the higer the price  Volatility, Interrest rate, Dividend yield, expectation value.

9.  Options:  Right to buy or sell  Stocks, indices, currencies  Future:  Obligation to buy or sell  Stocks, commodities  Always physical settlement 9

10. 10

11. 11

12.  ING Groep Call-optie sep-2012 6,00  Settlement 3rd Friday of the month (tomorrow) 12

13. 13

14.  LongShort  Strike price 14

15.  LongShort 15

16.  Buy 100 stocks  Sell 100 call options  (1 contract) 16

17.  You buy 1 call  And You write 1 call 17

18.  Call spread  AEX 18

19.  Option  Call  Put  Contract  Underlying values 19

20.  Current price philips € 15  We sell 1 put philips Dec-2012 14,00  @ €1,50  Philips drops to € 10  Do we make a profit? 20

21.  Current price Aegon € 3,50  We Buy 1 call december-2012 €3,00  @ €0,90  We Buy 1 put december-2012 €4,00  @ €0,90  Aegon increases to €5,- in december  Do we make a profit? 21

22.  Current price Arcelor Mittal: €15,50  We buy 1 call Arcelor Mittal Jun 15  @2,10  We sell 1 call Arcelor Mittal Jun 17  @1,10  What is your investment?  Arcelor increases to €19, what is your profit? 22

23.  This was the last regular lecture by us.  Post questions on facebook  Or mail to academy@bnrbeurs.nl 23

24. We hope you have enjoyed 24