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II. Types of Options & Features
Types of Options
Stock Options
Stock options will be the primary focus of this course as they are one of the most popular types of options. Naturally stock options use common stocks as the underlying interest. Stock options have physical settlement (they are settled by physical delivery of and payment for the stocks). Options are not available on all stocks, however they are available on most major stocks.
Index Options
There are index options based on most major indexes. Index options can be very useful in hedging the risk in a well diversified portfolio. Since an index is intangible and can not be bought or sold, index options are cash settled.
Other Types of Options
There are also many other types of options including:
- Bond options,
- Currency options,
- Interest rate options,
- Commodity options,
- Futures options,
- Swaptions, and
- 3-D currency options.
Copyright © 2004-2008 Delta Interval, Inc.(www.deltainterval.com), All Rights Reserved. Legal Notice.