As we know c±, saves interest as we have to pay premium price only instead of share price and make us loose dividend. This shows c+ , has a +ve function of interest and -ve of dividend. What will be the interpretation with regards to p+.
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Hi,
Since P+ i.e. put is the right to sell the underlying security at exercise price. This means neeche jaane se difference jayega. If we would have done S- instead of P+, we would’ve borrowed the share and short sold it. The money that we would’ve gotten by short selling it, we could’ve invested that money and earned interest. But since we opted for Option, we lost that interest gain, therefore put is a negative function of interest.
In case of dividends, think that we have the share right now and we have just bought put as the right to sell later, so we would get the dividends. If we would’ve short sold the share, we would not get any dividends as the dividend would belong to the person whom we short sold the share. Therefore, dividend is a positive function of Put Option.
Note: While answering the question, just think about call option and do vice versa for put option. Don’t think too much!
Hope this helps!