I&R M Options
3 important questions on I&R M Options
What is the difference between a European option and an American option?
A European option can be exercised only at the end of its life; An American option can be exercised at any time prior to expiration.
What does Out-of-the-money option (OTM) mean?
- Call: When stock price < strike price
- Put: When stock price > strike price
What is the put-call parity formula?
This equation relates to the prices of European calls to the prices of European puts.
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