Options and derivatives (intro)
General · Mathematics
Study notes
Q: Buy call, strike ₹100, premium ₹5. Stock at ₹110 and ₹95 at expiry. Profit? At ₹110: payoff 110-100 = ₹10. Profit: 10-5 = ₹5. At ₹95: payoff 0. Profit: -₹5 (lose premium). Breakeven: ₹105! Put: profits if falls! (Options: asymmetric bets!)