Hull: Chapter 10. 1. Options, Futures, and Other Derivatives, 7th. Edition,
Copyright © John C. Hull 2008 ... Options, Futures, and Other Derivatives 7th
Edition,.
Hull: Chapter 10
Options, Futures, and Other Derivatives, 7th
1
Take
a position in the option and the underlying.
Take
a position in 2 or more options of the same type (A spread) .
Combination: Take
a position in a mixture of calls & puts (A combination)
Options, Futures, and Other Derivatives 7th Edition, Copyright © John C. Hull 2008
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Profit
Profit
K K
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(a)
(b) Profit
Profit
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ST
(d) 3
Profit ST
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Options, Futures, and Other Derivatives 7th Edition, Copyright © John C. Hull 2008
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Profit K1
Options, Futures, and Other Derivatives 7th Edition, Copyright © John C. Hull 2008
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Options, Futures, and Other Derivatives 7th Edition, Copyright © John C. Hull 2008
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Profi t K1
Options, Futures, and Other Derivatives 7th Edition, Copyright © John C. Hull 2008
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Options, Futures, and Other Derivatives 7th Edition, Copyright © John C. Hull 2008
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Options, Futures, and Other Derivatives 7th Edition, Copyright © John C. Hull 2008
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Strip Options, Futures, and Other Derivatives 7th Edition, Copyright © John C. Hull 2008
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Options, Futures, and Other Derivatives 7th Edition, Copyright © John C. Hull 2008
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Profit ST
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Options, Futures, and Other Derivatives 7th Edition, Copyright © John C. Hull 2008
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Options, Futures, and Other Derivatives 7th Edition, Copyright © John C. Hull 2008
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A
combination of a bull call spread and a bear put spread.
If
all options are European a box spread is worth the present value of the difference between the strike prices.
If
they are American this is not necessarily so. (See Business Snapshot 10.1).
Options, Futures, and Other Derivatives 7th Edition, Copyright © John C. Hull 2008
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