L1 60 Option Markets and Contracts

This class was created by Brainscape user Steven Popovic. Visit their profile to learn more about the creator.

Decks in this class (17)

A,B,C
describe call and put options; distinguish between European and American options; define the concept of moneyness of an option;
13  cards
A - D Options Terminology, The Mechanics of Trading Options
Options terminology 1,
The mechanics of trading options 2
2  cards
60.F: COMPARE INTEREST RATE OPTIONS WITH FORWARD RATE AGREEMENTS (FRAS)
Options contracts and forward rat...
1  cards
a describe call and put options;
0  cards
b distinguish between European and American options;
0  cards
c define the concept of moneyness of an option;
0  cards
d compare exchange-traded options and over-the- counter options;
0  cards
e identify the types of options in terms of the underlying instruments;
0  cards
g define interest rate caps, floors, and collars;
0  cards
h calculate and interpret option payoffs and explain how interest rate options differ from other types of options;
0  cards
i define intrinsic value and time value, and explain their relationship;
0  cards
j determine the minimum and maximum values of European options and American options;
0  cards
k calculate and interpret the lowest prices of European and American calls and puts based on the rules for minimum values and lower bounds;
0  cards
l explain how option prices are affected by the exercise price and the time to expiration;
0  cards
m explain put–call parity for European options, and explain how put–call parity is related to arbitrage and the construction of synthetic options;
0  cards
n explain how cash flows on the underlying asset affect put–call parity and the lower bounds of option prices;
0  cards
o determine the directional effect of an interest rate change or volatility change on an option’s price.
0  cards

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L1 60 Option Markets and Contracts

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