ECON 302 Lecture : Lecture Notes
30 Jan 2014
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11/14/2013: youtube videos explaining how option contracts can be used to hedge (insure) a market position in the underlie (security itself), its consistent with the view that what these products do for you as an investor is give an ability to insure, to a degree, the risk that you take with your fundamental position http://www. youtube. com/watch?v=eei41a1sjsm http://www. youtube. com/watch?v=ioiwfhj3cmy http://www. youtube. com/watch?v=crjfhadvdqe http://www. youtube. com/watch?v=x5fxolbbw4e. I can buy it and then instantly sell it and put the in the pocket: the slope is a one for one slope after the point on the horizontal axis of , so for instance if the market price moves to , i would exercise my option and buy the stock at and sell it at , the meaning of the 45 degree line crossing the horizontal axis is that at that point, as the buyer of the option, i"ve recovered my premium.
