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Derivatives and Risk Management, 1st Edition
book

Derivatives and Risk Management, 1st Edition

by Sundaram Janakiramanan
May 2024
Intermediate to advanced content levelIntermediate to advanced
542 pages
27h 26m
English
Pearson India
Content preview from Derivatives and Risk Management, 1st Edition
284 Derivatives and Risk Management
12.19 Comparison Between Calls and Puts
It was seen earlier that
1. a person would buy a call option when the stock price is expected to increase; their gain would be
the dierence between the stock price at maturity and the exercise price less the premium paid for
buying the call option, and
2. a person would buy a put option when the stock price is expected to decrease; their gain would be
the dierence between the exercise price and the stock price at maturity less the premium paid for
buying the put option.
Since buying a call is appropriate when the stock price is expected to increase, it is oen erroneousl ...
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Publisher Resources

ISBN: 9781299447547Publisher Website