Introduction to Options, Pricing and Use Cases
Peter Eisenhardt
30 years: Capital markets & investment banking
Peter provides an overview of the basic methodology behind pricing options.
Peter provides an overview of the basic methodology behind pricing options.
Introduction to Options, Pricing and Use Cases
13 mins 18 secs
Options are financial instruments that give holders an option, but not an obligation, to buy or sell an underlying asset at an agreed price within the lifetime of the contract. The seller of an option is obliged to buy or sell if and when the buyer chooses to exercise it. Options are available on a wide range of assets, including stocks, bonds, commodities, currencies, futures, market indices, and funds.
Key learning objectives:
Define the basics of options pricing
Describe the basics of the Black-Scholes Model
Define options
Outline the advantages options offer in trading and hedging
Define delta trading
Define historic volatility and implied volatility
Understand how volatility is used to derive an option price
Learn the limitations of pricing models
Peter Eisenhardt
16:07
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