This document provides an overview of payoff diagrams for options. It defines a payoff diagram as a graphical representation of potential profits and losses from an options strategy based on the price of the underlying asset. The document explains that the vertical axis shows profits/losses and the horizontal axis shows the underlying asset price. It then gives an example of a long call option, which profits if the asset price rises above the strike price. In summary, the document defines payoff diagrams, explains how they illustrate options strategy outcomes, and provides an example for a long call option.
This ppt is prepared to provide detailed information regarding Forwards and Futures contracts of Derivatives the topics covered under this are Meaning of Forwards contracts, Underlying Assets of Forwards contracts, FEATURES OF FORWARD CONTRACTS, Tailored made, Why Forwards contracts, FUTURES CONTRACT, What is A Futures Contract, Characteristics of Futures contracts, Mechanism of Trading in Futures Market, Margin requirement, Marking-to-market (M2M), SETTLING A FUTURE POSITION, OFFSETTING, CASH DELIVERY, by Sundar, Assistant Professor of commerce.
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https://www.youtube.com/channel/UCjzpit_cXjdnzER_165mIiw
Descriptions and explanation of all types of derivative instruments to trade with on the capital market.
http://www.koffeefinancial.com/Static/Learn.aspx
Options Options are versatile financial instruments used for hedging, specula...sh158aron
American Options: These options can be exercised at any time up until the expiration date. They are commonly used for stocks and are more flexible for the holder.
European Options: These can only be exercised on the expiration date itself, not before. They are typically used for index options.
Bermudan Options: These are a hybrid between American and European options, allowing exercise on specific dates listed in the terms of the contract.
Based on Payout Structure
Vanilla Options: This includes basic calls and puts with standard payout structures. A call gives the holder the right to buy an asset, while a put gives the right to sell an asset at a predetermined price until a certain date.
This ppt is prepared to provide detailed information regarding Forwards and Futures contracts of Derivatives the topics covered under this are Meaning of Forwards contracts, Underlying Assets of Forwards contracts, FEATURES OF FORWARD CONTRACTS, Tailored made, Why Forwards contracts, FUTURES CONTRACT, What is A Futures Contract, Characteristics of Futures contracts, Mechanism of Trading in Futures Market, Margin requirement, Marking-to-market (M2M), SETTLING A FUTURE POSITION, OFFSETTING, CASH DELIVERY, by Sundar, Assistant Professor of commerce.
Subscribe to Vision Academy for Video assistance
https://www.youtube.com/channel/UCjzpit_cXjdnzER_165mIiw
Descriptions and explanation of all types of derivative instruments to trade with on the capital market.
http://www.koffeefinancial.com/Static/Learn.aspx
Options Options are versatile financial instruments used for hedging, specula...sh158aron
American Options: These options can be exercised at any time up until the expiration date. They are commonly used for stocks and are more flexible for the holder.
European Options: These can only be exercised on the expiration date itself, not before. They are typically used for index options.
Bermudan Options: These are a hybrid between American and European options, allowing exercise on specific dates listed in the terms of the contract.
Based on Payout Structure
Vanilla Options: This includes basic calls and puts with standard payout structures. A call gives the holder the right to buy an asset, while a put gives the right to sell an asset at a predetermined price until a certain date.
Delta One Stock Option Nivesh Pack Is Made for Investment opportunity Traders can gain roomy Benefit by Utilizing Stock Exchanging, Get Enlisted For Our Free Investment Trail Tips Preliminary.
Delta One Stock Option Nivesh Pack Is Made for Investment opportunity Traders can gain roomy Benefit by Utilizing Stock Exchanging, Get Enlisted For Our Free Investment Trail Tips Preliminary.
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Read| The latest issue of The Challenger is here! We are thrilled to announce that our school paper has qualified for the NATIONAL SCHOOLS PRESS CONFERENCE (NSPC) 2024. Thank you for your unwavering support and trust. Dive into the stories that made us stand out!
Instructions for Submissions thorugh G- Classroom.pptxJheel Barad
This presentation provides a briefing on how to upload submissions and documents in Google Classroom. It was prepared as part of an orientation for new Sainik School in-service teacher trainees. As a training officer, my goal is to ensure that you are comfortable and proficient with this essential tool for managing assignments and fostering student engagement.
The French Revolution, which began in 1789, was a period of radical social and political upheaval in France. It marked the decline of absolute monarchies, the rise of secular and democratic republics, and the eventual rise of Napoleon Bonaparte. This revolutionary period is crucial in understanding the transition from feudalism to modernity in Europe.
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Honest Reviews of Tim Han LMA Course Program.pptxtimhan337
Personal development courses are widely available today, with each one promising life-changing outcomes. Tim Han’s Life Mastery Achievers (LMA) Course has drawn a lot of interest. In addition to offering my frank assessment of Success Insider’s LMA Course, this piece examines the course’s effects via a variety of Tim Han LMA course reviews and Success Insider comments.
Macroeconomics- Movie Location
This will be used as part of your Personal Professional Portfolio once graded.
Objective:
Prepare a presentation or a paper using research, basic comparative analysis, data organization and application of economic information. You will make an informed assessment of an economic climate outside of the United States to accomplish an entertainment industry objective.
How to Make a Field invisible in Odoo 17Celine George
It is possible to hide or invisible some fields in odoo. Commonly using “invisible” attribute in the field definition to invisible the fields. This slide will show how to make a field invisible in odoo 17.
Operation “Blue Star” is the only event in the history of Independent India where the state went into war with its own people. Even after about 40 years it is not clear if it was culmination of states anger over people of the region, a political game of power or start of dictatorial chapter in the democratic setup.
The people of Punjab felt alienated from main stream due to denial of their just demands during a long democratic struggle since independence. As it happen all over the word, it led to militant struggle with great loss of lives of military, police and civilian personnel. Killing of Indira Gandhi and massacre of innocent Sikhs in Delhi and other India cities was also associated with this movement.
2. SYNOPSIS
❏ DERIVATIVES AND PAYOFF
❏ PAYOFF DIAGRAM
❏ MEANING
❏ PAYOFF CALL OPTION
❏ OPTION
❏ TYPES OF OPTION
❏ OPTION TERMINOLOGY
❏ REFERENCE
3. DERIVATIVES AND PAYOFF
• A derivative is a contract between
two parties which derives its
value/price from an underlying asset.
The most common types
of derivatives are
❑ futures,
❑ options,
❑ forwards and
❑ Swaps.
• A payoff is the likely profit/loss that
would accrue to a market participant
with change in the price of the
underlying asset.
This is generally depicted in the form
of payoff diagrams which show the
price of the underlying asset on the
X–axis and the profits/losses on the
Y–axis.
4. PAYOFF DIAGRAM MEANING
• “Pay off diagrams” a good way to understand the profits and losses
with a strategy
• A convenient way to envision what happens with option strategies as
the value of the underlying asset changes is with the use of a profit and
loss diagram, known as a “payoff diagram”. A Payoff diagram is a
graphical representation of the potential outcomes of a strategy. Results
may be depicted at any point in time, although the graph usually depicts
the results at expiration of the options involved in the strategy.
5. PAYOFF DIAGRAMS
• The vertical axis of the diagram
reflects profits or losses on option
expiration day resulting from
particular strategy, while the
horizontal axis reflects the
underlying asset price on option
expiration day. At expiration, there is
no time value left, so the option will
sell for its intrinsic value. By
convention, the diagrams ignore the
effect of commissions you have to
pay.
7. 4 MAIN STRATEGIES OF OPTIONS
INVESTMENT
LONG CALL
OPTION
SHORT CALL
OPTION
LONG PUT
OPTION
SHORT PUT
OPTION
8. OPTIONS
● Options are financial instruments that are derivatives that are based on the
value of underlying securities such as stocks. An options contract offers
the buyer the opportunity to buy or sell—depending on the type of
contract they hold—the underlying asset.
● An option gives the holder the right/option, but no obligation, to buy or
sell a security to the option writer/seller.
○ for a pre-sepcified price(strike price)
○ at (or up to)a given time in the future(the expiry date)
9. TYPES OF OPTIONS
Options can be further categorized based on the method in
which they are traded, their expiration cycle, and the underlying security they
relate to.
• Calls
• Puts
• American Style
• European Style
• Exchange Traded Options
• Over The Counter Options
•Option Type by Expiration
•Option Type by Underlying Security
•Employee Stock Options
•Cash Settled Options
•Exotic Options
10. OPTION TERMINOLOGIES
★ STRIKE PRICE
★ MARKET PRICE
★ EXPIRATION DATE
★ OPTION TYPE
★ BUYER AND WRITER OF A OPTION
★ MONEYNESS
■ IN THE MONEY
■ OUT THE MONEY
■ AT THE MONEY