put option 发表评论(0) 编辑词条

          A put option (usually just called a "put") is a financial contract between two parties, the writer (seller) and the buyer of the option. The buyer acquires a short position with the right, but not the obligation, to sell the underlying instrument at an agreed-upon price (the strike price). If the buyer exercises his right to sell the option, the seller is obliged to buy it at the strike price. In exchange for having this option, the buyer pays the writer a fee (the option premium).

Buying a put: A Buyer thinks price of a stock will decrease. Pay a premium which buyer will never get back, unless it is sold before expiration. The buyer has the right to sell the stock at strike price. A

Writing a put: Writer receives a premium. If buyer exercises the option, writer will buy the stock at strike price. If buyer does not exercise the option, writer's profit is premium. B

          'Trader A' (Put Buyer) purchases a put contract to sell 100 shares of XYZ Corp. to 'Trader B' (Put Writer) for $50/share. The current price is $55/share, and 'Trader A' pays a premium of $5/share. If the price of XYZ stock falls to $40/share right before expiration, then 'Trader A' can exercise the put by buying 100 shares for $4,000 from the stock market, then selling them to 'Trader B' for $5,000.

Trader A's total earnings (S) can be calculated at $500. Sale of the 100 shares of stock at strike price of $50 to 'Trader B' = $5,000 (P) Purchase of 100 shares of stock at $40 = $4,000 (Q) Put Option premium paid to Trader B for buying the contract of 100 shares @ $5/share, excluding commissions = $500 (R) S=P-(Q+R)=$5,000-($4,000+$500)=$500

       A put option is said to have intrinsic value when the underlying instrument has a spot price (S) below the option's strike price (K). Upon exercise, a put option is valued at K-S if it is "in-the-money", otherwise its value is zero. Prior to exercise, an option has time value apart from its intrinsic value. The following factors reduce the time value of a put option: shortening of the time to expire, decrease in the volatility of the underlying, and increase of interest rates. Option pricing is a central problem of financial mathematics.