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Topic: European put option

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	Put option - Wikipedia, the free encyclopedia
		A put option (sometimes simply called a "put") is a financial contract between two parties, the buyer and the seller of the option.
		The put allows the buyer the right but not the obligation to sell a commodity or financial instrument (the underlying instrument) to the seller of the option at a certain time for a certain price (the strike price).
		The most widely-known put option is for stock in a particular company.
	en.wikipedia.org /wiki/Put_option (758 words)

	Put-Call Parity
		A portfolio comprising a call option and an amount x of cash equal to the present value of the option's strike price has the same expiration value as a portfolio comprising the corresponding put option and the underlier.
		For European options, early exercise is not possible.
		It applies only to European options, since a possibility of early exercise could cause a divergence in the present values of the two portfolios.
	www.riskglossary.com /articles/put_call_parity.htm (473 words)

	Put-call parity - Wikipedia, the free encyclopedia
		An example, using stock options follows, though this may be generalised.
		Consider a call option and a put option with the same strike K for expiry at the same date T on some share, which pays no dividend.
		First consider a portfolio that consists of one put option and one share.
	en.wikipedia.org /wiki/Put-call_parity (454 words)

	ACC 372 Problem Set #4
		Since a call option can be duplicated by a portfolio combining the underlying stock and a risk free bond, it follows that a call option is less risky than the underlying stock.
		A bearish put spread is an investment strategy involving purchasing a put option with a high strike price and selling a put option with a low strike price (and the same maturity).
		European put options with strike prices of $48 and $52 which mature in one year.
	www.arts.uwaterloo.ca /~kvetzal/ACC372/assignment4/assignment4.html (929 words)

	WWWFinance - Option Contracts
		European options may only be exercised on the expiration day, while American options may be exercised at any time up to and including the expiration day.
		Suppose that a European put option on General Motors with an exercise price of $45 and six months to maturity is selling for $3, that the GM stock price is $40, and that the riskless rate of interest is 8% p.a.
		Similarly, the omega of the put option is
	www.duke.edu /~charvey/Classes/ba350_1997/options/options.htm (9439 words)

	Appendix A (Site not responding. Last check: 2007-11-07)
		Denoting the price of a European call option as c and the price of a European put option as p, the variables c and p are both functions of S (the underlying price), X (the exercise price), r (the interest rate), t (the number of years to expiry), and (the volatility).
		Since the options are European, they cannot be exercised prior to the expiration date.
		It shows that the value of a European call with a certain exercise price and exercise date can be deduced from the value of a European put with the same exercise price and date, and vice versa.
	www.clearlight.com /rtvsoft/diss17.htm (419 words)

	Put option - free-definition (Site not responding. Last check: 2007-11-07)
		A put option is a financial contract between two parties, the buyer and the seller of the option.
		A european put option allows the holder to exercise, i.e.
		The most widely-known put option is the stock option, the option to sell stock in a particular company.
	www.free-definition.com /Put-option.html (555 words)

	[No title]
		A traded option is available which has a delta of 0.8 and a gamma of 1.5.
		[Assume for simplicity that it has issued the put on one share of the fund.] Your assignment is to delta hedge the put option.
		A put option on the same stock has identical maturity and exercise price and sells for $3, which also is consistent with stock volatility of 20%.
	www2.bc.edu /~marcusal/MF860_Final_F00.doc (829 words)

	Power Point (Site not responding. Last check: 2007-11-07)
		We formed a portfolio in which we buy one European put option, and buy (-h) shares of the underlying stock (a protective put strategy).
		Thus, the portfolio value using the protective put strategy will be equal to the present value of the risk-free payoff at the maturity date.
		Please put adequate amount of efforts and continue to read chapter 15 and practice homework #5.
	bear.cba.ufl.edu /chenh/FIN4504summer2004/20040730.htm (270 words)

	[No title]
		An investor buys a European put option written on IBM shares.
		Option price Pt = $7.¡% >çÿ4çÿó ¨Trading Options (cont.)¡¨éExample of a put option - see plots (cont.).
		On the expiration day, the value of the option is PT = max (X - ST, 0).
	www.smeal.psu.edu /faculty/qxc2/backup/6.ppt (163 words)

	[No title]
		In all cases the options are European options, and the underlying bond is zero coupon instrument.
		Current Price Underlying bond $40 European call option which has an exercise price of $40 and which matures in 4 months 3 European put option which has an exercise price of $40 and which matures in 4 months 2 Annualized interest rate for 4 month loans is 5% Part b.
		Underlying bond $60 European call option which has an exercise price of $40 and which matures in 1 year 22 Annualized interest rate for 1 year loans is 11.111% Hint: You need to think of the range of possible current values for put.
	finance.wharton.upenn.edu /~unal2/notes/Options.doc (1730 words)

	Applied Mathematics Research, Department of Mathematics, Univ. of Manchester, UK
		A European put option is a contract between two parties (the holder and the underwriter), such that:
		Many other types of option exist - for example with American options the holder has the right to exercise the option at any time during the lifetime of the option.
		From a mathematical point of view, American options are challenging, and lead to a nonlinear (free-boundary) problem, which must generally be tackled computationally.
	www.ma.man.ac.uk /DeptWeb/Groups/Applied/FinancialMaths.html (327 words)

	DD N-P
		An option on the performance of one asset in excess of the performance of another.
		Apparently, they operate more or less as a call option on the underlying index, which could be any one of nine indexes.
		The issuer is betting that the Put Option will expire worthless – i.e., that interest rates will be low at the Put Date.
	www.margrabe.com /Dictionary/DictionaryNP.html (1877 words)

	[No title]
		For a European put option, the maximum value is the present value of the exercise price, i.e.
		PRINCIPLES OF OPTION PRICING Limits on the Difference in Premiums The difference in the premiums of two European put options with different exercise prices, say E1 and E2, is limited to be no greater than the difference between the present values of the exercise prices.
		For an American put option, the difference in the premiums is limited to be less than or equal to the difference between the two exercise prices.
	www.cba.uh.edu /pricha/4339/class05.ppt (369 words)

	[No title]
		A European put option earns the owner an amount equal to the exercise price minus the price at expiration, if the price at expiration is less than the exercise price.
		The file 02a-01-euro.xls contains a template that computes (based on the well-known Black-Scholes formula) the price of a European call and put based on the following inputs: today's stock price, the duration of the option (in years), the option's exercise price, the risk-free rate of interest (per year), and the annual volatility in stock price.
		Repeat parts a-d for a 6-month European put option with exercise price $40.
	pages.stern.nyu.edu /~djuran/02a-01-euro.doc (351 words)

	[No title] (Site not responding. Last check: 2007-11-07)
		Consider a three-month European put option (right to sell £) with exercise price 1.7500.
		Using a four-step binomial tree [each step is one month], value four-month ANF options.
		Using a real option analysis, what is the PV of the opportunity to do Phase I, recognizing the follow-on nature of Phase II?
	wehner.tamu.edu /FINC.WWW/FINC-Cuny/hw629.2.doc (840 words)

	Black-Scholes European Option Pricing (Site not responding. Last check: 2007-11-07)
		The piece is arguably one of the most important papers within finance theory to date and allows us to price various derivatives, including options on commodities, financial assets and even pricing of employee stock options.
		No dividends are paid out on the underlying stock during the option life.
		The Black-Scholes model today is used in everyday pricing of options and futures and almost all formulas for pricing of exotic options such as barriers, compounds and asian options take their foundation from the Black-Scholes model.
	www.global-derivatives.com /options/black-scholes.php (458 words)

	Black-Scholes option pricing (Site not responding. Last check: 2007-11-07)
		If you see this text then your browser is not understanding the applet
		This applet allows you to price European (and hence American) call options on shares that pay no dividends in the option period.
		Using put/call parity the value of the European put option is also given.
	www.csse.uwa.edu.au /~gordon/remote/applets/options.html (112 words)

	A Note on the Call-Put Parity and a Call-Put Duality
		Along with the well-known "call--put parity" relation that makes it possible to express the rational price of a put option in terms of the rational price of a call option, we introduce a "call--put duality" relation.
		This new concept offers a simple explanation of the relationship between the rational price of a put option and a call option, not only for options of the European type, but also for options of the American type.
		call--put parity, Black--Merton--Scholes model, call--put duality, American call--put option, European call--put option, optimal stopping problem, free-boundary problem
	epubs.siam.org /sam-bin/dbq/article/97884 (154 words)

	[No title]
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		What should you do if You want to hold the stock for the next 3 months?
	www.fiu.edu /~barberj/Ch08hull.ppt (209 words)

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