Analysis of Plain Vanilla and Combined Option Strategies - Essay Example

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Analysis of Plain Vanilla and Combined Option Strategies

Such buying or selling may take place on either a set date or a time before the date. The contract that enables such kind of financial trading to take place is referred to as option. There are several option strategies that may be used by the seller. Studies have actually showed that how careful a seller is in selecting an option goes a long way to determine the success of the transaction. This study gives emphasis to two of these option strategies namely plain vanilla and combined options. 1 Problem Definition and Objective The recent development of financial markets is connected with growing uncertainty of market participants. The current conflict in Syria, contrary expectations on the start of the Fed’s reduction of the quantitative easing program as well as mixed signs on economic growth in the US and Europe, are fueling investors fears. ...Show more

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Project Paper Fall Term 2013 Analysis of Plain Vanilla and Combined Option Strategies Name: Address: Submitted to: Submission Date: Table of Contents Table of Contents 1 List of abbreviations 1 List of figures and tables 2 1Introduction 3 1Problem Definition and Objective 3 2Course of the Investigation 3 2Theoretical Framework of Options 5 1Definition and Delimitation of the term “Option” (des Optionsbegriffs) 5 2Characteristics of Options 5 3Main Factors Influencing the Option Price 6 3Conception of the four Plain Vanilla Strategies 8 1Long Call 8 2Short Call 9 3Long Put 9 4Short Put 10 4Introduction to Combined Option Strategies 11 1Covered Call 11 2Protective Put 11 3Straddle 12 4Stran…
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