Management and Organizational Studies 3370A/B Lecture Notes - Lecture 9: Option Style, Call Option, Montreal Exchange

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 3370A/B
• Professor: Maria Ferraro

Document Summary

Options - are created by investors, sold to other investors. Call: buyer has the right, but not the obligation, to purchase a fixed quantity from the seller at a fixed price up to a certain date. Put: buyer has the right, but not the obligation, to sell a fixed quantity to the seller at a fixed price up to a certain date. Exercise (strike) price: the per-share price at which the common stock may be. Expiration date: last date at which an option can be exercised. Option premium: the price paid by the option buyer to the writer of the option, Call buyer expects the price of the underlying security to increase. Call seller expects the price of the underlying security to decrease or stay. Put buyer expects the price of the underlying security to decrease. Put seller expects the price of the underlying security to increase or stay the same.