in binomial model, net assets position= value of assets -value of liabilities
that means value of share- value of option payable to buyer?
why is option payable by seller to buyer which is deducted? how can buyer receive amount? plz explain.
in binomial model, net assets position= value of assets -value of liabilities
that means value of share- value of option payable to buyer?
why is option payable by seller to buyer which is deducted? how can buyer receive amount? plz explain.
| Originally posted by : ayesha | ||
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in binomial model, net assets position= value of assets -value of liabilities that means value of share- value of option payable to buyer? why is option payable by seller to buyer which is deducted? how can buyer receive amount? plz explain. |
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Basics of an Option is that the buyer has a right (to buy in CALL and to sell in PUT) so the seller may have to pay at the expiry of the option a VALUE on expiry (VALUE not amout)...thou i still dindnt get how is it relvent in "Binomial model"
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