Options

Objectives

Value equity options using the Binomial Option Pricing Model
Value equity options using Black-Scholes Option Pricing Model

Reading

Chapter 20: Option Pricing
Chapter 21: Options

Guest Lecture

Robert Schiller @ Yale in 2011
00:00 - Examples of Options Markets and Core Terms
07:11 - Purposes of Option Contracts
17:11 - Quoted Prices and the Role of Derivatives Markets
24:54 - Call and Put Options and the Put-Call Parity
34:56 - Boundaries on the Price of a Call Option
39:07 - Pricing Options with the Binomial Asset Pricing Model
51:02 - The Black-Scholes Option Pricing Formula
55:49 - The VIX Index in Comparison to Actual Market Volatility
69:33 - The Potential for Options in the Housing Market