Find the value of a european put option writer


Find the value of a european put option writer


This article needs additional citations for verification. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. (November 2015) ( Learn how and when to remove this template message)In finance, a put or put option is a stock market device which gives the owner of a put the right, but not the obligation, to sell an asset (the underlying), at a specified price (the strike), by a predetermined date (the expiry or maturity) to a given party (the seller of the put).

Put writing is an essential part of options strategies. Selling a put is a strategy where an investor writes a put contract, and by selling the contract to the put buyer, the investor has sold the right to sell shares at a specific price. Thus, the put buyer now has the right to sell shares to the put seller.Selling a put is advantageous to an investor, because he or she will receive the premium in exchange for committing to buy shares at the strike price if the contract is exercised.

Unformatted text preview:. I, II and III onlyD. This is in contrast to American options that can be exercised at any timeprior to expiration.A European option is used in order to reduce the variables in the equation. This is acceptable, since most U.S. company stock options are notexercised until their expiration (vesting) date. The price that the writer of a call OR put option receives for the underlying asset if the buyer executes her option is called theA. strike priceB.

exercise priceC. execution priceD. A or BE. A or C. An American call option allows the buyer toA. sell the underlying asset at the exercise price on or before the expiration date.B. buy the underlying asset at the exercise price on or before the expiration date.C. sell the option in the open market prior to expiration.D. A and C.E. B and C. A European call option allows the buyer toA. sell the underlying asset at the exercise price on the expiration date.B.

buy the underlying asset at the exercise price on or before the expiration date.C.




Find the value of a european put option writer

Find the value of a european put option writer


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