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Put and Call Options

Forums › ACCA Forums › ACCA AFM Advanced Financial Management Forums › Put and Call Options

  • This topic has 4 replies, 4 voices, and was last updated 9 years ago by Anonymous.
Viewing 5 posts - 1 through 5 (of 5 total)
  • Author
    Posts
  • February 4, 2016 at 7:20 pm #299311
    Robert
    Member
    • Topics: 58
    • Replies: 175
    • ☆☆☆

    Hi everybody,

    Can anyone share how they remember in what scenarios a call option is bought and when a put option is bought?

    Many thanks

    February 5, 2016 at 11:01 am #299365
    elomi
    Member
    • Topics: 4
    • Replies: 17
    • ☆

    Dear Robert,

    In Examination Question Option to Delay or Expand are called Call Options and Option to Redeploy or Withdraw (meaning terminating the project) are called Put Options.

    I do hope your Question is answered.

    Mohammed.

    February 5, 2016 at 2:45 pm #299386
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54659
    • ☆☆☆☆☆

    If you are referring to foreign exchange or interest rate options, then the rules are all covered in detail in my free lectures.

    February 5, 2016 at 3:20 pm #299392
    Robert
    Member
    • Topics: 58
    • Replies: 175
    • ☆☆☆

    Hi both, thanks for your replies. Yes john I am indeed asking about foreign exchange and interest rate options. I am aware that these are covered in the lectures. I have watched them and appreciate them fully.
    My question was poorly worded. What I’m asking for is a way to remember when to buy a call option and when to buy a put.
    I can work it out myself but I wont have the luxury of time in the exam to work it out, thus I was after a way to remember it – a mnemonic for example would be useful.
    Thanks for the lectures John

    April 23, 2016 at 1:42 pm #312350
    Anonymous
    Inactive
    • Topics: 0
    • Replies: 7
    • ☆

    Currency Option
    BBPO -Borrower ($) Buy Put Option
    PCBC- Pay Currency (not $) Buy Call option

    Interest Rate Option

    Rising Interest Rate
    BBPO -Borrower Buy Put Option

    Falling Interest Rate
    LBCO-Lenders Buy Call Option

    Uttam

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    Posts
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