Abstract
Before option pricing can be properly examined, three key concepts must be introduced: in-the-money, at-the-money, and out-of-the-money.
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Notes
Black, F., and Scholes, M. ‘The Pricing of Options and Corporate Liabilities’, Journal of Political Economy May—June 1973, pp.637–59. Although Black and Scholes got all the glory, Robert C. Merton of MIT was hot on the trail of solving the problem and barely missed out.
See Merton, R. ‘Theory of Rational Option Pricing’, Bell Journal of Economics and Management Science Spring 1973, pp.141–83 for what may be the best of the early articles on options pricing.
Tompkins, R. ‘S&P 500 Stock Index Volatilities: Business Cycle Patterns’. Market Perspectives, Vol.1, No.3, June/July 1983.
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© 1991 Palgrave Macmillan, a division of Macmillan Publishers Limited
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Tompkins, R.G. (1991). Basic Concepts in Options Pricing. In: Bund Options. Finance and Capital Markets. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-12800-6_2
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DOI: https://doi.org/10.1007/978-1-349-12800-6_2
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