Figure 2312

Option Payoff Profiles

Information on commodity futures and options can be found at , www.futuresbasics.com.

Table 23.2 gives a few futures options quotations from The Wall Street Journal. Briefly, looking at the orange juice options, note that the first column of numbers tells us the different strike prices that are available.3 The next three columns are call option prices (or premiums) for three different months of expiration. The final three columns are put option prices for the same three months.

3Notice that the strike prices are all quoted in cents; for example, the first entry for oil is 2600, meaning $26 per barrel.

Ross et al.: Fundamentals of Corporate Finance, Sixth Edition, Alternate Edition

VIII. Topics in Corporate Finance

23. Risk Management: An Introduction to Financial Engineering

© The McGraw-Hill Companies, 2002

CHAPTER 23 Risk Management: An Introduction to Financial Engineering

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