optionsmarkets∶introduction(编辑修改稿)

optionsmarkets∶introduction(编辑修改稿)内容摘要：

a lower exercise price is more valuable than the right to purchase at a higher price. Thus the January expiration IBM call option with strike price $130 sells for $ whereas the $135 exercise price January call sells for only $.84. Conversely, put options are worth more when the exercise price is higher: You would rather have the right to sell shares for $135 than for $130, and this is reflected in the prices of the puts. The January expiration put option with strike price $135 sells for $, whereas the $130 exercise price January put sells for only $.p. 671If an option does not trade on a given day, three dots will appear in the volume and price columns. Because trading is infrequent, it is not unusual to find option prices that appear out of line with other prices. You might see, for example, two calls with different exercise prices that seem to sell for the same price. This discrepancy arises because the last trades for these options may have occurred at different times during the day. At any moment, the call with the lower exercise price must be worth more than an otherwiseidentical call with a higher exercise price.Expirations of most exchangetraded options tend to be fairly short, ranging up to only several months. For larger firms and several stock indexes, however, longerterm options are traded with expirations ranging up to several years. These options are called LEAPS (for LongTerm Equity AnticiPation Securities).CONCEPTCHECK1a.What will be the proceeds and net profits to an investor who purchases the January expiration IBM calls with exercise price $125 if the stock price at expiration is $135? What if the stock price at expiration is $115?b.Now answer part (a) for an investor who purchases a January expiration IBM put option with exercise price $125.American and European OptionsAn American option An American option can be exercised before and up to its expiration date. Compare with a European option, which can be exercised only on the expiration date. allows its holder to exercise the right to purchase (if a call) or sell (if a put) the underlying asset on or before the expiration date. European options A European option can be exercised only on the expiration date. Compare with an American option, which can be exercised before, up to, and on its expiration date. allow for exercise of the option only on the expiration date. American options, because they allow more leeway than their European counterparts, generally will be more valuable. Virtually all traded options in the United States are American style. Foreign currency options and stock index options are notable exceptions to this rule, however.Adjustments in Option Contract TermsBecause options convey the right to buy or sell shares at a stated price, stock splits would radically alter their value if the terms of the options contract were not adjusted to account for the stock split. For example, reconsider the IBM call options in Figure . If IBM were to announce a 2for1 split, its share price would fall from about $127 to about $. A call option with exercise price $130 would be just about worthless, with virtually no possibility that the stock would sell at more than $130 before the options expired.To account for a stock split, the exercise price is reduced by a factor of the split, and the number of options held is increased by that factor. For example, each original call option with exercise price of $130 would be altered after a 2for1 split to 2 new options, with each new option carrying an exercise price of $65. A similar adjustment is made for stock dividends of more than 10%。 the number of shares covered by each option is increased in proportion to the stock dividend, and the exercise price is reduced by that proportion.p. 672In contrast to stock dividends, cash dividends do not affect the terms of an option contract. Because payment of a cash dividend reduces the selling price of the stock without inducing offsetting adjustments in the option contract, the value of the option is affected by dividend policy. Other things being equal, call option values are lower for highdividend payout policies, because such policies slow the rate of increase of stock prices。 conversely, put values are higher for highdividend payouts. (Of course, the option values do not necessarily rise or fall on the dividend payment or exdividend dates. Dividend payments are anticipated, so the effect of the payment already is built into the original option price.)CONCEPTCHECK2Suppose that IBM39。 s stock price at the exercise date is $140, and the exercise price of the call is $130. What is the payoff on one option contract? After a 2for1 split, the stock price is $70, the exercise price is $65, and the option holder now can purchase 200 shares. Show that the split leaves the payoff from the option unaffected.The Options Clearing CorporationThe Options Clearing Corporation (OCC), the clearinghouse for options trading, is jointly owned by the exchanges on which stock options are traded. Buyers and sellers of options who agree on a price will strike a deal. At this point, the OCC steps in. The OCC places itself between the two traders, being the effective buyer of the option from the writer and the effective writer of the option to the buyer. All individuals, therefore, deal only with the OCC, which effectively guarantees contract performance.When an option holder exercises an option, the OCC arranges for a member firm with clients who have written that option to make good on the option obligation. The member firm selects from its clients who have written that option to fulfill the contract. The selected client must deliver 100 shares of stock at a price equal to the exercise price for each call option contract written or must purchase 100 shares at the exercise price for each put option contract written.Because the OCC guarantees contract performance,。