put option

• Put Option

https://store.theartofservice.com/the-put-option-toolkit.html

Digital rights management - Analog hole

1 In order to prevent this exploit there has been some discussions between

copyright holders and manufacturers of electronics capable of playing such content, to no longer include analog

connectivity in their devices. The movement dubbed as "Analog Sunset"

has seen a steady decline in analog output options on most Blu-ray devices

manufactured after 2010.


General Motors - Former affiliates

1 Fiat (2000–2005), GM owned 20 percent at one

time with put option


Airbus - Expansion and sale of BAE stake

1 Due to lengthy negotiations and disagreements over price, BAE

exercised its put option which saw investment bank Rothschild

appointed to give an independent valuation.


Computer appliance - Appliances in industrial automation

1 PLC (programmable logic controller) - Programmable logic controllers are

appliances that are typically used for discrete control and offer a wide

range of Input and Output options. They are configured through standardized programming

languages such as IEC-1131.


PlayStation 4 technical specifications - Input and output

1 Audio/video output options include HDMI and TOSLINK|

optical S/PDIF


PlayStation 4 - Technical specifications

1 PlayStation 4 features WiFi and Ethernet connectivity, Bluetooth, and two USB 3.0 ports.

An auxiliary port is also be included for connection to the #PlayStation Camera|

PlayStation Camera, a motion detection digital camera device first introduced on the PS3. A mono headset, which can be plugged into the

DualShock 4, is bundled with the system. Audio/video output options include HDMI TV and TOSLINK|optical S/PDIF audio. The console does

not have an Analog recording|analog audio/video output.


.mobi - Reception

1 Websites may be optimized for the special capabilities and restrictions of mobile

devices, such as smaller screens, device form/size, device input/output options,

existence of embedded sensors (acceleration, location, touch, etc.), as well as human factors such as expectations of immediacy of results, context awareness

under a shortened attention span (compared to non-mobile device use of the

Internet)https://store.theartofservice.com/the-put-option-toolkit.html

Bridge financing - Example

1 At KKR's option, these loans could then be replaced with eight-year corporate bonds (in effect, a put

option) paying 11.75%


Valuation (finance) - Valuation overview

1 #Valuation of options|Option pricing models are used for certain types of financial assets

(e.g., Warrant (finance)|warrants, put options, call options, employee stock options, investments with embedded

options such as a callable bond) and are a complex present value model. The most common option pricing models are the Black–Scholes-Robert C. Merton|Merton

models and lattice model (finance)|lattice models.


EADS - Formation and expansion (1999–2008)

1 Due to the slow pace of informal negotiations, BAE exercised its put

option which saw investment bank N M Rothschild Sons|Rothschild

appointed to give an independent valuation


Gambling - Non-casino gambling games

1 *Card games, such as Liars poker|Liar's poker, Contract bridge|Bridge,

Basset (card game)|Basset, Lansquenet, Piquet, Put option|Put,

Teen patti


SAS (software) - Development

1 For example, more output options were added in version

8


Security (finance)

1 A 'security' or 'financial instrument' is a tradable asset of any kind.The United States Securities Exchange Act of 1934 defines a security as: Any note, stock,

treasury stock, Government investment|bond, debenture, certificate of interest or participation in any profit-sharing agreement or in any oil, gas, or

other mineral royalties|royalty or lease, any collateral (finance)|collateral Trust certificate (finance)|trust certificate, preorganization certificate or

subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit, for a security, any put option|put, call option|call,

straddle, option (finance)|option, or group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle,

option, or privilege entered into on a national Exchange (organized market)|securities exchange relating to foreign currency, or in general, any Financial instrument|instrument commonly known as a security; or any certificate of

interest or participation in, temporary or interim certificate for, receipt for, or warrant or right to subscribe to or purchase, any of the foregoing; but shall

not include currency or any note, draft, bill of exchange, or banker's acceptance which has a Maturity (finance)|maturity at the time of issuance of not exceeding nine months, exclusive of days of grace, or any renewal thereof

the maturity of which is likewise limited


Electricity market - Risk management

1 Many other Hedge (finance)|hedging arrangements, such as swing

contracts, Virtual Bidding, Financial Transmission Rights, call options and

put options are traded in sophisticated electricity markets. In

general they are designed to transfer financial risks between participants.


Corporate finance - Valuing flexibility

1 Again, a DCF valuation would capture only one of these outcomes.) Here: (1) using Option

(finance)|financial option theory as a framework, the decision to be taken is identified as

corresponding to either a call option or a put option; (2) an appropriate valuation technique is

then employed – usually a variant on the Binomial options model or a bespoke Monte Carlo methods in finance|simulation model,

while Black-Scholes formula|Black Scholes type formulae are used less often; see Contingent

claim valuation


Channel coordination - Options

1 (put option) products later. The options can be bought at a


Restore Cursor Position (ANSI)

1 In computing, 'ANSI escape code' (or 'escape sequences') is the method of

in-band signaling to control formatted text|formatting, color, and

other output options on video text terminals


Chevrolet Silverado - Vortec High Output/Vortec Max

1 The Vortec High Output option (also known as the VHO by some

enthusiasts) was first introduced in 2004 to a limited market (mainly consisting of Texas and several

surrounding areas)


Deutsche Bank - Leveraged super-senior trades

1 In October 2008 they stopped modelling the gap option and just

bought SP put options to guard against further market disruption, but one of the whistleblowers has described this as an inappropriate

hedge


Oscilloscope - Vertical sensitivity, coupling, and polarity controls

1 Most oscilloscopes offer the DC input option


CTV Television Network - Baton takes over

1 This gave Baton controlling interest in the network, triggering a put option allowing the remaining

affiliates to sell their CTV shares without selling their stations, which

they did


ISO 10962 - Existing Possible Values

1 ** P = Put Option (finance)|Options


At the money

1 In finance, 'moneyness' is the relative position of the current price

(or future price) of an underlying asset (e.g., a stock) with respect to

the strike price of a derivative (finance)|derivative, most commonly

a call option or a put option


At the money

1 and is equal to the auxiliary N(d2) term in the Black–Scholes formula. This can also be

measured in standard deviations, measuring how far above or below the strike price the current price is, in terms of volatility; this quantity is given by d2. Another closely

related measure of moneyness is the Delta (finance)|Delta of a call or put option, which is often used by traders but actually equals N(d1), not N(d2), and there are others, with

convention depending on market.


At the money - Example

1 Suppose the current stock price of IBM is $100. A call option|call or put option with a strike of $100 is at-the-money. A call option with a strike of $80 is in-the-money (100 minus; 80

= 20 gt; 0). A put option with a strike at $80 is out-of-the-money (80 minus; 100 = minus;20 lt; 0).

Conversely, a call option with a $120 strike is out-of-the-money and a put option with a $120 strike is in-the-

money.


At the money - Intrinsic value and time value

1 The intrinsic value (or monetary value) of an option is its value

assuming it were exercised immediately. Thus if the current

(Spot price|spot) price of the underlying security (or commodity etc.) is above the agreed (Strike

price|strike) price, a Call option|call has positive intrinsic value (and is called in the money), while a Put

option|put has zero intrinsic value (and is out of the money).


At the money - In the money

1 An 'in the money' (ITM) option has positive intrinsic value as well as time value. A call option is in the

money when the strike price is below the spot price. A put option is in the

money when the strike price is above the spot price.


At the money - Out of the money

1 An 'out of the money' (OTM) option has no intrinsic value. A call option is

out of the money when the strike price is above the spot price of the underlying security. A put option is out of the money when the strike

price is below the spot price.


Computer fraud case studies - Notable incidents

1 Duronio also purchased more than $21,000 of put option contracts for

UBS PaineWebber's parent company, UBS, A.G.'s stock, hoping that the stock would decline in response to the damage caused by the logic

bomb


Liquidity risk - Derivatives

1 * Bermudan-style return put option: Right to put the option at a specified strike.


Derivative (finance) - Common derivative contract types

1 Similarly, the buyer of a Put option has the right to sell a certain

quantity of an underlying asset, at a specified price on or before a given

date in the future, he however has no obligation whatsoever to carry out

this right.


Derivative (finance) - Common derivative contract types

1 Similar to a Call and Put option, a Swaption is of two kinds: a receiver

Swaption and a payer Swaption


Government contract - Clauses for Government Contracts

1 Also, the automated systems frequently do not allow inclusion of

various non standard work statement, instructions or clauses due to limitations on input options.


Government contract - Real options analysis

1 One way to look at this situation is that a multi-year contract contains a

real option for the contractor to escape the uncertainty associated

with a sequence of single-year contract negotiations (analogous to a

put option)


General Motors Corporation - Former affiliates

1 * Fiat (2000–2005), GM owned 20 percent at one time with put option. The two companies continue to work

together on sharing automotive platforms.


Put option

1 If the price of the stock declines below the specified price of the put option, the owner of the put has the right, but not the obligation, to sell

the asset at the specified price, while the seller of the put, has the

obligation to purchase the asset at the strike price if the buyer uses the right to do so (the buyer is said to

exercise the put or put option)https://store.theartofservice.com/the-put-option-toolkit.html

Put option - Instrument models

1 The terms for exercising the option's right to sell it differ depending on option style. A European option|European put option allows the

holder to exercise the put option for a short period of time right before

expiration, while an American option|American put option allows exercise

at any time before expiration.



1 The most widely-traded put options are on stock|stocks/equities, but they

are traded on many other instruments such as interest rates

(see interest rate floor) or commodities.



1 Generally, a put option that is purchased is referred to as a long put

and a put option that is sold is referred to as a short put.



1 A 'naked put', also called an uncovered put, is a put option whose writer (the seller) does not have a position in the

underlying stock or other instrument. This strategy is best used by investors who want to accumulate a position in the

underlying stock, but only if the price is low enough. If the buyer fails to exercise the options, then the writer keeps the option premium as a gift for playing the game.



1 If the underlying stock's market price is below the option's strike price

when expiration arrives, the option owner (buyer) can exercise the put option, forcing the writer to buy the underlying stock at the strike price


Put option - Example of a put option on a stock

1 :Trader A's total earnings '(S)' can be calculated at $500. The sale of the 100 shares of stock at a strike price

of $50 to Trader B = $5,000 '(P)'. The purchase of 100 shares of stock at $40 = $4,000 '(Q)'. The put option

premium paid to trader B for buying the contract of 100 shares at $5 per

share, excluding commissions = $500 '(R)'. Thus 'S = ( P - Q ) - R = ($5,000 - $4,000 ) - $500 = $500'.


Put option - Example of a put option on a stock

1 The following factors reduce the time value of a put option: shortening of the time to expire, decrease in the Volatility (finance)|volatility of the

underlying, and increase of interest rates


Put option - Payoff of a put

1 Let \Pi be a put option for this instrument, purchased at time 0,

expiring at time T\in\mathbb^, with exercise (strike) price of K\in\mathbb;

and let S:[0,T]\to\mathbb be the price of the underlying instrument.


Put option - Payoff of a put

1 Hence the pay-off, i.e. the value of the put option at expiry, is


Valuation of options - Intrinsic value

1 For a put option, the option is in-the-money if the strike price is higher

than the underlying price; then the intrinsic value is the strike price

minus the underlying price


Valuation of options - Intrinsic value

1 Conversely if you are holding a put option and NIFTY is below strike price

then your option has an intrinsic value equalling the difference

between the strike price and NIFTY value. So,


Valuation of options - Time value

1 * Price of the underlying: Any fluctuation in the price of the

underlying (stock/index/commodity) obviously has the largest impact on premium of an option contract. An

increase in the underlying price increases the premium of call option and decreases the premium of put

option. Reverse is true when underlying price decreases.


Business valuation - Option pricing

1 However, ascribing the entire value of a put option to marketability is misleading, because the primary

source of put value comes from the downside price protection


Hedge (finance) - Hedging a stock price

1 If the trader was able to short sell an asset whose price had a

mathematically defined relation with Company A's stock price (for

example a put option on Company A shares), the trade might be

essentially riskless. In this case, the risk would be limited to the put

option's premium.


Hedge (finance) - Related concepts

1 ** Put option: A contract that gives the owner the right, but not the obligation, to sell an item in the future, at a price decided now.


Madoff investment scandal - Purported strategy

1 In his 1992, Avellino and Bienes interview with The Wall Street Journal, Madoff discussed his

supposed methods: In the 1970s, he had placed invested funds in

convertible arbitrage positions in large-cap stocks, with promised

investment returns of 18% to 20%, and in 1982, he began using futures

contracts on the stock index, and then placed put options on futures during the 1987 stock market crash


Black–Scholes model - The Black-Scholes world

1 For the special case of a European call or put option, Black and Scholes showed that it is possible to create a

Hedge (finance)|hedged position, consisting of a long position in the stock and a short position in the

option, whose value will not depend on the price of the stock


Stock - Stock derivatives

1 Specifically, a call option is the right (not obligation) to buy stock in the

future at a fixed price and a put option is the right (not obligation) to

sell stock in the future at a fixed price


Option (finance)

1 An option which conveys to the owner the right to buy something at

a specific price is referred to as a 'call option|call'; an option which

conveys the right of the owner to sell something at a specific price is referred to as a 'put option|put'


Option (finance) - Contract specifications

1 * whether the option holder has the right to buy (a call option) or the

right to sell (a put option)


Exotic option - Features

1 A straight call option|call or put option|put option, either Option style|American or Option style|European, would be considered non-exotic or

vanilla option. There is no strict definition of what is considered an

exotic option but it could have one or more of the following features:


Bond (finance) - Others

1 ** Putability — Some bonds give the holder the right to force the issuer to repay the bond before the maturity

date on the put dates; see put option. These are referred to as retractable or putable bonds.


Real options valuation

1 For example, the opportunity to invest in the expansion of a firm's factory, or alternatively to sell the factory, is a real call option|call or

put option, respectively


Real options valuation - Options relating to project size

1 *'Option to contract ': The project is engineered such that output can be

contracted in future should conditions turn out to be

unfavourable. Forgoing these future expenditures constitutes Exercise

(options)|option exercise. This is the equivalent to a put option, and again, the excess upfront expenditure is the

option premium.https://store.theartofservice.com/the-put-option-toolkit.html

Real options valuation - Options relating to project size

1 *'Option to expand or contract': Here the project is designed such that its operation

can be dynamically turned on and off. Management may shut down part or all of

the operation when conditions are unfavourable (a put option), and may restart operations when conditions improve (a call option). A flexible manufacturing system (FMS) is a good example of this type of option. This option is also known as a

'Switching option'.https://store.theartofservice.com/the-put-option-toolkit.html

Real options valuation - Options relating to project life and timing

1 *'Option to abandon': Management may have the option to cease a project during its life, and, possibly, to realise its salvage value. Here, when the present value of the

remaining cash flows falls below the liquidation value, the asset may be sold,

and this act is effectively the exercising of a put option. This option is also known as a 'Termination option'. Abandonment options

are American option|American styled.


Real options valuation - Valuation inputs

1 *** the option to contract the project (an American option|American styled put option);


Futures contract - Options on futures

1 A put option|put is the option to sell a futures contract, and a call option|

call is the option to buy a futures contract


Algorithmic trading - History

1 At about the same time Constant proportion portfolio insurance|

portfolio insurance was designed to create a synthetic put option on a

stock portfolio by dynamically trading stock index futures according

to a computer model based on the Black–Scholes option pricing model.


Airbus UK - History

1 In April 2006 BAE Systems announced its intention to sell its share of Airbus SAS to EADS.[http://news.bbc.co.uk/1/hi/business/4885426.stm BAE Systems to sell Airbus stake]. BBC News. April 6, 2006. BAE originally sought to agree a price with EADS through an informal process. However due to the slow pace of negotiations

and disagreements over price, BAE exercised its put option which saw investment bank N M

Rothschild Sons|Rothschild appointed to give an independent valuation.


Securities

1 A 'security' is a tradable asset of any kind.The United States Securities Exchange Act of 1934 defines a security as: Any note, stock, treasury stock,

Government investment|bond, debenture, certificate of interest or participation in any profit-sharing agreement or in any oil, gas, or other mineral royalties|royalty or lease, any collateral (finance)|collateral Trust

certificate (finance)|trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate,

certificate of deposit, for a security, any put option|put, call option|call, straddle, option (finance)|option, or group or index of securities (including any

interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national Exchange (organized market)|securities exchange relating to foreign currency, or in general, any Financial instrument|instrument commonly known as a security; or any certificate of

interest or participation in, temporary or interim certificate for, receipt for, or warrant or right to subscribe to or purchase, any of the foregoing; but shall

not include currency or any note, draft, bill of exchange, or banker's acceptance which has a Maturity (finance)|maturity at the time of issuance of not exceeding nine months, exclusive of days of grace, or any renewal thereof

the maturity of which is likewise limited


Share repurchase

1 Under US Corporations law|corporate law there are five primary methods of stock repurchase: open market,

private negotiations, repurchase 'put option|put' rights and two variants of self-tender repurchase: a fixed price

tender offer and a Dutch auction


Reverse greenshoe

1 A 'Reverse greenshoe' is a special provision (accounting)|provision in an Initial Public Offering|IPO prospectus (finance)|prospectus, which allows underwriters to sell shares back to

the issuer. If a 'regular' greenshoe is, in fact, a call option written by the

issuer for the underwriters, a reverse greenshoe is a put option.


Reverse greenshoe - How reverse greenshoe option works

1 *Reverse greenshoe option is a put option for a given amount of shares

(15% of the issued amount, for example) held by the underwriter

against the issuer (if a primary offering) or against the majority

shareholder/s (if a secondary offering).


Option contract - Introduction

1 * 'Put options', which give the beneficiary the right to require the

grantor to buy or receive the property at the agreed price on

exercise.


Preferred stock - Types

1 * Putable preferred stock—These issues have a Put option|put

privilege, whereby the holder may (under certain conditions) force the

issuer to redeem shares.


PCP

1 *Put–call parity, in financial mathematics a relationship between the price of a call option and a put

option


2010 Flash Crash - Early theories

1 Earlier, some investigators suggested that a large purchase of put options on the SP 500|SP 500 index by the hedge fund Universa Investments shortly before the crash may have been among the

primary causes.[http://online.wsj.com/article/SB10001424052748704879704575

236771699461084.html Did a Big Bet Help Trigger 'Black Swan' Stock Swoon?], Wall Street Journal, May 11,

2010[http://blogs.forbes.com/streettalk/2010/05/07/was-the-market-mayhem-a-mistake-maybe-not/ Was The Market Mayhem A Mistake?

Maybe Not.], Liz Moyer, Forbes.com Other reports have speculated that the event may have been triggered by a single sale of 75,000 E-mini SP 500 contracts valued at around $4 billion by the Overland Park, Kansas

firm Waddell Reed on the Chicago Mercantile Exchange.[http://www.huffingtonpost.com/2010/10/01/flash-crash-

report-one-41_n_747215.html 'Flash Crash' Report:

Waddell Reed's $4.1 Billion Trade Blamed For Market Plunge] Others suspect a movement in the U.S


Warren Buffett - Recession starting in 2007

1 Some of Buffett's Index put options (European exercise at expiry only)

that he wrote (sold) were running at around $6.73billion mark-to-market

losses as of late 2008


Strike price

1 In finance, the 'strike price' (or 'exercise price') of an option

(finance)|option is the fixed price at which the owner of the option can

buy (in the case of a call option|call), or sell (in the case of a put option|

put), the underlying security or commodity.


Strike price - Moneyness

1 ** A put option is in-the-money if the strike price is above the market price

of the underlying stock.



1 * A call or put option is at-the-money if the stock price and the exercise

price are the same (or close).



1 ** A put option is out-of-the-money if the strike price is below the market

price of the underlying stock.


9/11 conspiracy theories - Suspected insider trading

1 Just before 9/11 there was an extraordinary amount of put options

placed on United Airlines and American Airlines stocks. Authorities

believed, and some conspiracy theorists continue to maintain, that insider trading|trading insiders may

have known in advance of the coming events of 9/11 and placed their bets accordingly. An analysis

into the possibility of insider trading on 9/11 concludes that:


9/11 conspiracy theories - Suspected insider trading

1 On September 10, more trading in Chicago saw the purchase of 4,516

put options in American Airlines, the other airline involved in the

hijackings


September 11 attacks advance-knowledge conspiracy theories

1 Some of the primary concerns include whether the Presidency of George W. Bush|Bush

administration or United States Armed Forces had awareness of the planned attack methods,

the precise volume of intelligence that US Intelligence Community|American agencies had regarding al-Qaeda activities inside the United

States, whether the put options placed on United Airlines and American Airlines and other

trades indicate foreknowledge, and why the identities of the traders have never been made

public.


September 11 attacks advance-knowledge conspiracy theories - Insider trading

1 An article published in The Journal of Business in 2006 provides statistical

evidence of unusual put option market activity days before 9/11:


Beta (finance)

1 A beta above one generally means that the asset both is volatile and tends to move up and down with the market. An example is a

stock in a big technology company. Negative betas are possible for investments that tend to go down when the market goes up, and

vice versa. There are few fundamental investments with consistent and significant

negative betas, but some derivative (finance)|derivatives like equity (finance)|equity put

options can have large negative betas.


Short (finance) - Futures and options contracts

1 An investor can also purchase a put option, giving that investor the right (but not the

obligation) to sell the underlying asset (such as shares of stock) at a fixed price. In

the event of a market decline, the option holder may exercise these put options,

obliging the counterparty to buy the underlying asset at the agreed upon (or strike) price, which would then be higher than the current quoted spot price of the

asset.https://store.theartofservice.com/the-put-option-toolkit.html

Treasury stock - Incentives

1 A dividend payment short term always decreases the value of shares after the payment, so, for stocks with regularly scheduled dividends, on the

day shares go ex-dividend, call option holders always lose whereas

put option holders benefit


Apple displays - Connectors

1 The Apple Video Adapter is for S-Video or Composite video output only, use a separate Apple VGA

Adapter for VGA video output options


Apple displays - Connectors

1 :Compatible with: eMac, iMac G5, iMac G4 flat-panel, 12-inch

PowerBook G4, or iBooks having a Mini-VGA port. Most Macintosh

computers with the Mini-VGA port can also use the Apple Video Adapter

for S-video Composite output options.


Adobe Captivate - Versions

1 *'Adobe Captivate 5.5' (May 2011) New features include gradients, shadows, and object rotation, enhanced quiz/assessment

templates, MP4 output option, YouTube publishing option, pay-as-

you go subscription licensing option. Available as a stand-alone product or as part of the Adobe eLearning Suite

2.5 bundle.https://store.theartofservice.com/the-put-option-toolkit.html

Adobe Captivate - Versions

1 *'Adobe Captivate 4' (Jan 2009) New features included SWF commenting,

professional project templates, customizable widgets, roundtrip

PowerPoint workflow, table of contents and aggregator, text-to-

speech functionality, variables and advanced actions, expanded output

options, Adobe Photoshop layer support


Put/call ratio

1 'Put/call ratio' (or put–call ratio, PCR) is a technical indicator demonstrating investors'

sentiment.[http://www.investopedia.com/terms/p/putcallratio.asp Put–Call Ratio] The ratio represents a proportion between all the put options and all the call options purchased on

any given day. The put/call ratio can be calculated for any individual stock, as well as

for any index, or can be aggregated. The ratio may be calculated using the numbers of puts and calls or on a dollar-weighted basis.


Exchange-traded fund - Trading

1 Also, many ETFs have the capability for Option (finance)|options (Put

option|puts and Call option|calls) to be written against them


Economic stability - Firm-Level Stability Measures

1 Ultimately, the model measures the value of the firm’s assets (weighted

for volatility) at the time that the debtholders exercises their “put option” by expecting repayment


Delta neutral - Creating the position

1 One example of delta neutral strategy is buying a deep in the

money call and buying a deep in the money put option. Deep in the

money call will have delta of 1 and deep in the money put will have

delta of -1. Hence their deltas will cancel each other to some extent of

stock price movement.


Volatility arbitrage - Overview

1 Because of the put–call parity, it doesn't matter if the options traded are call option|calls or put option|

puts


Convergence trade - Risks

1 In effect, convergence traders synthesize a put option on their

ability to finance themselves.The Basis Monster That Ate Wall Street


Long (finance)

1 An Option_(finance)|options investor goes long on the Underlying|

underlying instrument by buying call options or writing put options on it.


Marketable securities

1 A 'security' is a tradable financial asset of any kind.The United States Securities Exchange Act of 1934 defines a security as: Any note, stock, treasury stock, Government investment|bond, debenture, certificate of

interest or participation in any profit-sharing agreement or in any oil, gas, or other mineral royalties|royalty or lease, any collateral (finance)|collateral Trust certificate (finance)|trust certificate, preorganization certificate or

subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit, for a security, any put option|put, call option|call,

straddle, option (finance)|option, or group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle,

option, or privilege entered into on a national Exchange (organized market)|securities exchange relating to Currency|foreign currency, or in general, any

Financial instrument|instrument commonly known as a security; or any certificate of interest or participation in, temporary or interim certificate for,

receipt for, or warrant or right to subscribe to or purchase, any of the foregoing; but shall not include currency or any note, draft, bill of exchange,

or banker's acceptance which has a Maturity (finance)|maturity at the time of issuance of not exceeding nine months, exclusive of days of grace, or any

renewal thereof the maturity of which is likewise limited


Long/short equity

1 'Long/short equity' is an investment strategy generally associated with hedge

funds, and more recently certain progressive traditional asset managers. It involves

buying long equities that are expected to increase in value and selling short equities

that are expected to decrease in value. This is different from the risk reversal strategies

where investors will simultaneously buy a call option and sell a put option to simulate being

long in a stock.


Parity

1 * Put–call parity, in financial mathematics, defines a relationship between the price of a European call

option and a European put option


Bond option

1 Generally, one buys a call option on the bond if one believes that interest rates will fall,

causing an increase in bond prices. Likewise, one buys the put option if one believes that

the opposite will be the case. [http://financial-dictionary.thefreedictionary.com/Bond

%2boption] One result of trading in a bond option, is that the price of the underlying

bond is locked in for the term of the contract, thereby reducing the credit risk associated

with fluctuations in the bond price.


Bond option - Embedded options

1 *Puttable bond: allows the holder to demand early redemption at a

predetermined price at a certain time in future. The holder of such a bond

has, in effect, purchased a put option on the bond.


Bond option - Relationship with caps and floors

1 European Put options on zero coupon bonds can be seen to be equivalent to suitable caplets, i.e. interest rate

cap components, whereas call options can be seen to be equivalent to suitable floorlets, i.e. components

of interest rate floors. See for example Brigo and Mercurio (2001),

who also discuss bond options valuation with different models.


Greeks (finance) - Practical use

1 For a vanilla option, delta will be a number between 0.0 and 1.0 for a long Call option|call (or a short put)

and 0.0 and −1.0 for a long Put option|put (or a short call);

depending on price, a call option behaves as if one owns 1 share of the underlying stock (if deep in the

money), or owns nothing (if far out of the money), or something in

between, and conversely for a put option


Potential future exposure - Relevance

1 When the rare event occurs, the person (or more likely her employer)

who wrote the insurance (or in options terminology - the person who

was short (finance)|short a put option|put or call option|call / shorted

volatility (finance)|volatility / was short gamma) sustains massive

losses and may go bankrupt


Myron Scholes

1 The model provides a conceptual framework for valuing Option

(finance)|options, such as call option|calls or put option|puts, and is

referred to as the Black–Scholes model.


Greenspan put

1 The term Put refers to a put option, in which the buyer of the put

acquires the right to sell an asset at a particular price to a counterparty; it can be exercised if prices decline

below that price


Covered warrant - Structure and features

1 A covered warrant gives the holder the right, but not the obligation, to buy (Call option|call warrant) or to

sell (Put option|put warrant) an underlying asset at a specified price

(the strike or exercise price) by a predetermined date


Garman–Kohlhagen model - Example

1 This type of contract is both a call option|call on dollars and a put

option|put on Pound sterling|sterling, and is typically called a GBPUSD put, as it is a put on the exchange rate;

although it could equally be called a USDGBP call.


Garman–Kohlhagen model - Terms

1 * Put option – the right to sell an asset a fixed

date and price.


Garman–Kohlhagen model - Terms

1 For example, a call option on oil allows the investor to buy oil at a

given price and date. The investor on the other side of the trade is in effect selling a put option on the currency.


Garman–Kohlhagen model - Hedging

1 Using options, the UK firm can purchase a GBP call/USD put option (the right to sell part or all of their

expected income for pounds sterling at a predetermined rate), which:


Garman–Kohlhagen model - Valuation: the Garman–Kohlhagen model

1 The value of a put option has value


FeaturePak - Socket Interface

1 FeaturePak cards are powered by 3.3V and use standard 3.3V logic

levels. The socket also provides a 5V input option, for cards that require

the additional voltage to power auxiliary functions.


Split share corporation

1 The dividend income from the underlying shares may be insufficient

to pay out the dividend income for both the preferred and capital

shares. In order to produce more income, split share corporations will

sometimes employ Covered call|covered call writing and Put option|

cash-covered put writing.


Put-call parity

1 In financial mathematics, 'put–call parity' defines a relationship

between the price of a European call option and European put option, both

with the identical strike price and expiry, namely that a portfolio of long a call option and short a put option is equivalent to (and hence

has the same value as) a single forward contract at this strike price

and expiryhttps://store.theartofservice.com/the-put-option-toolkit.html

Put-call parity - Derivation

1 Consider a call option and a put option with the same strike K for

expiry at the same date T on some stock S, which pays no dividend. We

assume the existence of a Bond (finance)|bond that pays 1 dollar at

maturity time T. The bond price may be random (like the stock) but must

equal 1 at maturity.


Put-call parity - Derivation

1 Let the price of S be S(t) at time t. Now assemble a portfolio by buying a call option

C and selling a put option P of the same maturity T and strike K. The payoff for this portfolio is S(T) - K. Now assemble a second portfolio by buying one share and borrowing

K bonds. Note the payoff of the latter portfolio is also S(T) - K at time T, since our share bought for S(t) will be worth S(T) and

the borrowed bonds will be worth K.


Annual Percentage Rate - Not a comparable standard

1 In effect, the lease includes a put option back to the manufacturer (or,

alternatively, a call option for the consumer), and the value (or cost) of

this option to the consumer is not transparent.


Callable bond

1 The price behaviour of a callable bond is the opposite of that of

puttable bond. Since call option and put option are not mutually

exclusive, a bond may have both options

embedded.[http://nd.edu/~zda/TeachingNote_ConvertibleBonds.pdf

Teaching Note on Convertible Bonds]


Sparre–Anderson model - Classical model

1 Other finance-related quantities belonging to the class of the

expected discounted penalty function include the perpetual American put

option, the contingent claim at optimal exercise time, and more.


Straddle - Long straddle

1 A long straddle involves going long, i.e., purchasing, both a call option and a put option on some stock, interest rate, index (economics)|

index or other underlying



1 If the price goes down, he uses the put option

and ignores the call option



1 If the stock is sufficiently volatile and option duration is long, the trader

could profit from both options. This would require the stock to move both

below the put option's strike price and above the call option's strike price at different times before the

expiry date.


Straddle - Short straddle

1 A short straddle position is highly risky, because the potential loss is unlimited due to the sale of the call and the put options which expose the investor to unlimited

losses (on the call) or losses equal to the strike price (on the put), whereas

profitability is limited to the premium gained by the initial sale of the options. The

Collar (finance)|Collar is a more conservative opposite that limits gains and

losses.https://store.theartofservice.com/the-put-option-toolkit.html

Reverse convertible - Features

1 The additional barrier event increased the protection for the

investors, as the put option would not come into effect unless the

(down) barrier was hit


Reverse convertible - Taxes

1 For tax purposes Reverse convertible notes are considered to have two components: a debt portion and a put option. At maturity, the option

component is taxed as a short-term capital gain if the investor receives the cash settlement. In the case of

physical delivery, the option component will reduce the tax basis of the Reference Shares delivered to

their accounts.https://store.theartofservice.com/the-put-option-toolkit.html

Hull–White model - Derivative pricing

1 Thus it is possible to value many derivatives V dependent solely on a single bond P(S,T) analytically when working in the Hull–White model. For example in the case of a put option|

bond put


Simple DirectMedia Layer - History

1 SDL 2.0 is a major update to the SDL 1.2 codebase with a different, not

backwards-compatible[http://wiki.libsdl.org/moin.cgi/MigrationGuide#Backward-compatibility MigrationGuide - SDL Wiki']. Wiki.libsdl.org (2013-11-21). Retrieved on 2013-12-08. API. It replaces several parts of the 1.2 API

with more general support for multiple input and output options.


Real estate derivative - Put

1 With the real estate put option (Selling price decline insurance)

investor can sell an option thus the investor underwrites price decline

insurance. Property owner, who buys the option, is protected against price

decline of the property.


Exercise (options)

1 When exercising a call option, the owner of the option purchases the underlying shares (or commodities, fixed interest securities, etc.) at the strike price from the option seller,

while for a put option, the owner of the option sells the underlying to the

option seller, again at the strike price.


Exercise (options) - Exercise Considerations

1 # For an American-style put option, 'early exercise' is a possibility for deep in-the-

money options. In this case, it may make sense to exercise the option early in order

to obtain the profit earlier so that it can start to earn interest immediately. This is somewhat more likely to be worthwhile if there is no ex-dividend date (which would probably cause the price of the underlying to fall further) between now and the expiry

date.https://store.theartofservice.com/the-put-option-toolkit.html

Options strategies - Neutral or non-directional strategies

1 *Collar (finance)|Collar - buy the underlying and then simultaneous

buying of a put option below current price (floor) and selling a call option

above the current price (cap).


Options strategies - Neutral or non-directional strategies

1 *Jade Lizard option strategy|Jade Lizard - a bull vertical spread created using call options, with the addition of a put option sold at a strike price lower than the strike prices of the call spread in the same expiration

cycle.


Seth Klarman - Career

1 May 18, 2010 He is a very conservative investor, and often holds a significant amounts of cash in his investment portfolios, sometimes in excess of 50%

of the total.[http://www.whartonjournal.com/media/paper2

01/news/2005/12/05/News/Seth-Klarmans.Guide.To.Finding.Value-1120327.shtml?norewritesourcedomain=www.whartonjournal.com

The Wharton Journal] 12/5/05 He often makes unusual investments, buying unpopular assets while

they are undervalued, using complex Derivative (finance)|derivatives, and buying put options


Puttable bond

1 'Puttable bond' (put bond, putable or retractable bond) is a

bond (finance)|bond with an embedded option|embedded put option. The holder of the puttable

bond has the right, but not the obligation, to demand early

repayment of the principal sum|principal. The put option is

exercisable on one or more specified dates.[http://www.investopedia.com/t

erms/p/putbond.asp Put Bond] at Investopedia. Accessed September

27, 2011.


Puttable bond

1 The price behaviour of puttable bonds is the opposite of that of a

callable bond. Since call option and put option are not mutually

exclusive, a bond may have both options

embedded.[http://nd.edu/~zda/TeachingNote_ConvertibleBonds.pdf

Teaching Note on Convertible Bonds]


Puttable bond - Pricing

1 'Price of puttable bond = Price of straight bond +

Price of put option'


Puttable bond - Pricing

1 * Price of a puttable bond is always higher than the price of a straight bond because the put

option adds value to an investor;[http://www.imf.org/external/pubs/ft/wp/

2003/wp03201.pdf Puttable and Extendible Bonds: Developing Interest Rate Derivatives for

Emerging Markets], IMF, 2003W. Sean Cleary and Charles P. Jones,

[http://classes.uleth.ca/200803/mgt3412a/ch02.ppt Investment Alternatives], Investments: Analysis and Management, John Wiley Sons

Canada Ltd, 2005


Constant proportion portfolio insurance - Dynamic trading strategy

1 With this feature being ensured by contract with the buyer, the writer has to put up money of his own to cover for the difference (the issuer has effectively written a put option

on the structure NAV)


Lonely Planet - Purchase by BBC Worldwide

1 Managing director of BBC Worldwide's global brands division, Marcus Arthur, who became

the chairman of Lonely Planet after the finalization of the agreement, explained in

2011 that implementing a put option arrangement allowed the BBC to benefit from the Wheelers' experience over the last three and a half years, further explaining that the founding couple supported Lonely Planet's ongoing migration from a traditional book

publisher to a multi-platform brand.


Risk reversal - Risk Reversal investment strategy

1 Then as the stock goes up in price, the call option will be worth more, and the put option will be worth

less.http://www.quantprinciple.com/invest/index.php/docs/quant_strategies/riskreversal/ Theory of Risk Reversal


Risk reversal - Risk reversal (measure of vol-skew)

1 Risk Reversal can refer to the manner in which similar out-of-the-money option (finance)|call and put options, usually foreign exchange

options, are quoted by Finance dealers. Instead of quoting these

options' prices, dealers quote their Volatility (finance)|volatility.


Holy grail distribution

1 For example, maintaining protection from market crashes by maintaining an exposure to an out-of-the-money put option on a market index follows a “minus-Taleb” distribution because options premiums have to be paid to

maintain the position and options tend to expire worthless in most

cases


Network appliance - Appliances in industrial automation

1 # 'PLC (programmable logic controller)' - Programmable logic

controllers are appliances that are typically used for discrete control and

offer a wide range of Input and Output options. They are configured through standardized programming

languages such as IEC-1131.


Process Driven Messaging Service - Jobs

1 Jobs provide a means to encapsulate a process. A Job is a configuration representing input options, the steps in the process, a filter

expression that matches the nodes where those steps will execute, and execution control

parameters that specify if steps are run in parallel. One might find certain command

executions are done repeatedly, and perhaps, represent what has become a routine

procedure. Routine processes need to be encapsulated and become the basis for other

routine procedures. https://store.theartofservice.com/the-put-option-toolkit.html

Edit Decision List - Systems known to support EDL to some extent

1 Almost Comparison of video editing software#Output options|any

professional editing system and many others support some form of

XML/EDL saving/processing.


Mathias Döpfner - Axel Springer SE

1 In 2002 Döpfner demanded the redemption of a put option of Springer shares in the Leo Kirch company ProSieben/Sat1. The Munich film distributor was not able to

muster the 770 million Euros due however – the beginning of the end of the

KirchMedia media empire which declared itself bankrupt in April 2002. At that time,

the Springer partner Leo Kirch held 40 percent of the Springer publishing house.


Airbus Industrie - Expansion and sale of BAE stake


exercised its put option which saw investment bank N M Rothschild

Sons|Rothschild appointed to give an independent valuation.


Medium term note

1 MTNs can be issued with a fixed maturity date (noncallable) or can be issued with

embedded call or put options and triggers where the notes will redeem early based on

certain parameters. MTNs are most commonly issued as senior, unsecured debt

of investment grade credit rated entities which have fixed rates. MTNs offer more

flexibility to the issuer and investor both in terms of structure and documentation.


Pro Tools - Pro Tools LE systems

1 The Eleven Rack, in addition to its many input options, includes in-box

DSP processing via a FPGA chip offloads the Eleven guitar

amp/speaker emulation and guitar effects plug-in processing to the

interface, allowing those plug-ins to run without taxing the host system.


Moto G (2nd generation) - Firmware updates

1 The main primary change noticed in this update is the ability to swipe to the right from primary home screen to access personalized Google Now

cards, updates to Google Now Launcher, improvement in battery

life, new Language and input options a brand new design for the Powered By Android logo on the boot screen.


CTV.ca - Baton takes over

1 This gave Baton a 57.2 percent controlling interest in the network, triggering a put option allowing the remaining affiliates to sell their CTV shares without selling their stations,

which they did


Zomba Group of Companies - From BMG to Sony, and recent activities

1 In June 2002, Clive Calder decided to

exercise the put option


Immediate Payment Service - Benefits of IMPS

1 * Multiple input options to choose for initiating transactions, such as MMID/

Account /AADHAAR


General Motors Europe - 1970-2008

1 GM divested its minority equity interests and dissolved the

partnership in 2005, following a legal fight regarding the conditions of a

put option afforded Fiat.


Options (finance) - According to the option rights

1 * Put options give you the right but not the obligation, to sell something at a specific price for a specific time

period.


Coca-Cola Bottlers Philippines, Inc. - Coca-Cola FEMSA (2013)

1 Coca-Cola FEMSA will have an option to acquire the remaining 49% of

CCBPI at any time during the next 7 years and will have a put option to sell its ownership back to TCCC any

time during year six.http://www.rappler.com/business/20399-mexico-s-femsa-closes-deal-

to-buy-coca-cola-philippines-bottling-operations


CTVglobemedia - Baton-Electrohome alliance

1 These two deals were approved by the CRTC in

August.[http://www.crtc.gc.ca/eng/archive/1997/DB97-527.HTM Decision

CRTC 97-527], August 28, 1997 Baton now held controlling interest in

CTV, triggering a put option that allowed the other owners to sell their

stakes in the network while still keeping their stations


Infratil - Former

1 *Lübeck Airport (Infratil exercised its put option in respect of its 90% shareholding and ownership has

transferred to the City of Lübeck on 30 October

2009)[http://www.nzx.com/markets/NZSX/IFT/announcements/3021197/Sal

e-of-Luebeck-Airport-Embargoed-until-12-noon-31-Oct-09 NZX

announcement]https://store.theartofservice.com/the-put-option-toolkit.html

Intrinsic theory of value

1 # For call options, this is the difference between the underlying

stock's price and the strike price. For put options, it is the difference

between the strike price and the underlying stock's price. In the case

of both puts and calls, if the respective difference value is

negative, the instrinsic value is given as zero.


Economic history of Argentina - Economic crisis

1 Argentine debt, held mostly in bonds, was massively put option|sold short

and the government found itself unable to borrow or meet debt

payments.


Garanti Bank - Milestones

1 *Sold its 20% shareholding in Eureko Insurance to Eureko B.V. by exercising its put

option.


The Taking of Pelham 123 (2009 film) - Plot

1 One of the Mayor's aides mentions the extreme drop in the major stock

indexes in response to the train hijacking, and the Mayor deduces

that Ryder is actually attempting to manipulate the market via put

options


BAE Systems Surface Ships - Exit by VT Group

1 VT Group's put option valued its share at a minimum of £380million subject to conditions; however it

received £346 million after various payments to BAE


TF1 Group - Television

1 Should Discovery exercise its option, TF1 Group would have the ability to then exercise a put option over the

remaining 49% that would see Discovery take full control


Le Chiffre - 2006 film biography

1 Though SkyFleet's shares have been skyrocketing, he plans to Short selling|short the company by

purchasing put options, and ordering the destruction of the company's

new prototype airliner, set to make its first flight out of Miami

International Airport


Government procurement in the United States - Clauses for Government Contracts

1 Also, the automated systems frequently do not allow inclusion of

various non standard work statement, instructions or clauses due to limitations on input options.


List of Zomba Group companies - B

1 Clive Calder enacted on the put option in mid-2002, and by the end of the year, owner ship of the two holding companies went to BMG.


Aabar Investments - Daimler AG

1 Aabar had entered derivative transactions, mainly collar (finance)|

collar trades and put options, to finance the acquisition.


Airbus S.A.S. - Expansion and sale of BAE stake


exercised its put option which saw investment bank N M Rothschild

Sons|Rothschild appointed to give an independent valuation.


Loose Change (film) - Recut contents

1 There is also mention that from September 6 to September 10 an

unusual amount of put options were placed on the stock of American

Airlines, Boeing and United Airlines


For More Information, Visit:

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