Finance Theory — 10.6: Options: Calls, Puts, and Insurance скачать в хорошем качестве

Finance Theory — 10.6: Options: Calls, Puts, and Insurance

How do options actually work, and why are they structurally identical to insurance policies? This video builds options from the ground up — call and put payoff diagrams, the asymmetry that distinguishes options from futures, and the precise mapping between a put option and an insurance contract. We then examine how implied volatility drives the cost of protection, with the VIX spiking tenfold during crises like 2008 and COVID-19. Key concepts covered: • Call and put option mechanics — strike price, expiration, American vs. European exercise • Payoff formulas: max(0, S_T − K) for calls, max(0, K − S_T) for puts • The asymmetric payoff: why the "kink" at the strike price matters • Options vs. futures — bounded downside vs. symmetric exposure • Put options as insurance: asset insured, deductible, coverage, premium, and policy term • Portfolio protection in action — creating a price floor while preserving upside • Implied volatility and the VIX as a real-time price tag on market fear • Why protection costs 10x more during a crisis (buying fire insurance while the building burns) • Decision framework: risk tolerance vs. fair pricing of premiums • Preview of the Black-Scholes model for pricing options ——————————————————— ORIGINAL SOURCE This video distills concepts from the following lecture:    • Ses 10: Forward and Futures Contracts II &...   Full credit to the original author and channel for the source material. ———————————————————