Options – A Backgrounder



A. Derivative Types 

B. Continuous Compounding 

C. Option Valuation 

D. Option Pricing Band 

          i. Upper Bound: Call Option

          ii. Upper Bound: Put Option 

          iii. Lower Bound: Call Option 

           iv. Lower Bound: Put Option 

E. Put-Call Parity: European Options 

          i. Position A undervalued 

          ii. Position B Undervalued 

F. Put-Call Parity: American Options 

G. Dividends 

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