Call - Equity Derivatives Provision: Difference between revisions

Latest revision as of 12:21, 10 May 2022

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-{{eqderivanat|2.3(a)}}
+#redirect[[Option Type - Equity Derivatives Provision]]
-The basic definition of a [[call option]]. I am entitled to buy shares from you at a pre-agreed price ({{eqderivprov|Strike Price}}) on a pre-agreed date (i.e., a {{eqderivprov|European Option}}) or a any time up to a pre-agreed date (i.e., an {{eqderivprov|American Option}}).
-At any time where the prevailing share price is above the {{eqderivprov|Strike Price}}, your option is [[in-the-money]]. If the share price is below the {{eqderivprov|Strike Price}} it is [[out-of-the-money]]. The option has [[time value]] though, so just because it it out of the money it doesn't mean it's worthless.