Risk Management Applications of Option Strategies
CFA level I
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Derivatives
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Risk Management Applications of Option Strategies
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Learning Outcome Statements |
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1. Call option and put option strategies
a. determine the value at expiration, the profit, maximum profit, maximum loss, breakeven underlying price at expiration, and payoff graph of the strategies of buying and selling calls and puts and determine the potential outcomes for investors using these strategies; |
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2. Covered call and protective put strategies
b. determine the value at expiration, profit, maximum profit, maximum loss, breakeven underlying price at expiration, and payoff graph of a covered call strategy and a protective put strategy, and explain the risk management application of each strategy. |
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Risk Management Applications of Option Strategies: Chapter Test
6 Questions, 9 Minutes |