Basic American put and call option pricing at expiration in U.S. Capital market
The purpose of this research paper is to study basic American put and call option pricing at expiration in U.S. capital market. A secondary purpose is to analyze strategies to use American options and the influence on the gain from capital market by using these options. rnrnThe theory which has initiated this thesis is derived from International Financial Management, Eun and Resnick (2001).rnrnThe research was conducted using observational study, by calculating terminal value from using basic option pricing at expiration formula, and also by referring from books, journals and other sources for theories so as to calculate the percentage of writers having strategies to use options. Calculations to compare the gains at expiration from using or not using basic American options have furthermore been conducted.rnrnThe essentials of understanding options contracts, how to use them and the difference in the gains they could provide can hopefully be achieved after completion of this thesis.
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