5
Chapter 5 of 10
Introduction to Options
22 marks (15%)~9 hours study17 sections · 16 practice questions
Learning objectives
- Define a call and put option, distinguishing buyer and writer.
- Draw payoff and P&L diagrams at expiry for the four basic option positions.
- Identify the determinants of option price (intrinsic vs time value).
- Apply Black-Scholes thinking to call/put pricing (conceptually).
- Compute and interpret option Greeks — delta, gamma, theta, vega, rho.
Topics covered
01Call and put options — rights and obligations
02Option premium components — intrinsic and time value
03Payoff diagrams — long call, short call, long put, short put
04Option pricing — Black-Scholes intuition
05Implied volatility
06Option Greeks — delta, gamma, theta, vega, rho
07Moneyness — ITM, ATM, OTM
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A peek at what's inside Chapter 5:
17
study sections
First section: "Why this chapter matters"
20
cheat-sheet terms
Includes: Call, Put, Writer / seller...
16
practice MCQs
Interactive — click an option to reveal the correct answer + explanation
3 underlying tabs
Equity / Currency / Interest Rate views
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