Options
/* THESE ARE juST RANDOM NOTES AND NOT READY FOR PRIMETIME.*/
Consider a pizza coupon
Section titled “Consider a pizza coupon”
Consider auto coverage
Section titled “Consider auto coverage”
Recognize that the right to sell is not the same as the obligation to sell!
Consider an auto insurance policy.* You pay a premium for coverage. If your car is in a collision, you have a “right” to payment from the insurer, making up for your loss.
*To be clear, options are not insurance, just as they are not pizza coupons, but the analogy is useful in understanding how a put value changes.
Comparing strikes and expirations
Section titled “Comparing strikes and expirations”
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Comparing values at expiration
Section titled “Comparing values at expiration”
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Volatility and option prices
Section titled “Volatility and option prices”
Historical vs. implied “vol”
Section titled “Historical vs. implied “vol””Historical vs. implied “vol” Implied volatility is calculated from option market prices as an output of a pricing model. It reflects the degree of future volatility expected by options traders
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