Options Markets and Properties of Options
Free GARP FRM Part I lesson in Financial Markets and Products. 17 min read, ~2,582 words.
Moneyness: ITM = positive intrinsic, OTM = zero intrinsic, ATM = strike near spot. Intrinsic + time value = premium. Lower bounds (no dividends): call; put. Both bounded below by zero. Put-call parity (European, no dividend):. With dividend yield q:. American calls on non-dividend stock: never exercise early, selling the...
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- Example 1
- Example 2
- Common Mistakes
- Key Takeaways
- Exam Shortcuts
Learning objectives
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