Markets

Examples of options

Examples of options in corporate finance include: 1. Share warrants, giving the holder the option to buy shares directly from the company at a fixed exercise price for a given period of time. 2. Convertible Joan stock, giving the holder a combination of a straight loan or bond and a call option. On exercising the Read More…

Markets

Factors that influence the option price

The various factors which influence the option price are: 1. current price of the underlying asset. 2. strike price. 3. time to expiration of the option. 4. expected price volatility of the underlying asset over the life of the option. 5. short-term risk-free interest rate over the life of the option. 6. anticipated cash payments Read More…