“As with insurance premiums, assuming that option sellers can accurately assess the probability of each possible outcome, their total payments out on expiry of a portfolio of options sold should approximate to the premiums received. Option pricing theory therefore depends on assessing these probabilities.”

Two sections in this chapter include some mathematical equations which may seem rather more complex than those we have looked at so far – the sections on Black–Scholes ...

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training,
learning paths, books, interactive tutorials, and more.