【正文】 n or before a specified expiration date. gives its holder the right to sell an asset for a specified exercise or strike price on or before some expiration date. A January expiration put on IBM with exercise price $130 entitles its owner to sell IBM stock to the put writer at a price of $130 at any time before expiration in January even if the market price of IBM is less than $130. While profits on call options increase when the asset increases in value, profits on put options increase when the asset value falls. A put will be exercised only if the exercise price is greater than the price of the underlying asset, that is, only if its holder can deliver for the exercise price an asset with market value less than the exercise price. (One doesn39。t need to own the shares of IBM to exercise the IBM put option. Upon exercise, the investor39。s broker purchases the necessary shares of IBM at the market price and immediately delivers, or “puts them,” to an option writer for the exercise price. The owner of the put profits by the difference between the exercise price and market price.)Example Profits and Losses on a Put OptionNow consider the January 2010 expiration put option on IBM with an exercise price of $130, selling on December 2, 2009, for $. It entitled its owner to sell a share of IBM for $130 at any time until January 15. If the holder of the put buys a share of IBM and immediately exercises the right to sell at $130, net proceeds will be $130 ? $ = $. Obviously, an investor who pays $ for the put has no intention of exercising it immediately. If, on the other hand, IBM sells for $123 at expiration, the put turns out to be a profitable investment. Its value at expiration would be and the investor39。s profit would be $ ? $ = $. This is a holding period return of $$ = .461, or %—over only 44 days! Apparently, put option sellers on December 2 (who were on the other side of the transaction) did not consider this oute very likely.An option is described as in the money In the money describes an option whose exercise would produce profits. Out of the money describes an option where exercise would not be profitable. when its exercise would produce profits for its holder. An option is out of the money Out of the money describes an option where exercise would not be profitable. In the money describes an option where exercise would produce profits. when exercise would be unprofitable. Therefore, a call option is in the money when the asset price is greater than the exercise price. It is out of the money when the asset price is less than the exercise price。 no one would exercise the right to purchase for the strike price an asset worth less than that price. Conversely, put options are in the money when the exercise price exceeds the asset39。s value, because delivery of the lowervalued asset in exchange for the exercise price is profitable for the holder. Options are at the money When the exercise price and asset price of an option are equal. when the exercise price and asset price are equal.p. 670Options TradingSome options trade on overthecounter markets. The OTC market offers the advantage that the terms of the option contract—the exercise price, expiration date, and number of shares mitted—can be tailored to the needs of the traders. The costs of establishing an OTC option contract, however, are higher than for exchangetraded options.Options contracts traded on exchanges are standardized by allowable expiration dates and exercise prices for each listed option. Each stock option contract provides for the right to buy or sell 100 shares of stock (except when stock splits occur after the contract is listed and the contract is adjusted for the terms of the split).Standardization of the terms of listed option contracts means all market participants trade in a limited and uniform set of securities. This increases the depth of trading in any particular option, which lowers trading costs and results in a more petitive market. Exchanges, therefore, offer two important benefits: ease of trading, which flows from a central marketplace where buyers and sellers or their representatives congregate。 and a liquid secondary market where buyers and sellers of options can transact quickly and cheaply.Figure Stock options on IBM Closing prices as of December 2, 2009Source: The Wall Street Journal Online, December 3, 2009.Until recently, most options trading in the United States took place on the Chicago Board Options Exchange. However, by 2003 the International Securities Exchange, an electronic exchange based in New York, displaced the CBOE as the largest options market. Options trading in Europe is uniformly transacted in electronic exchanges.Figure is a selection of listed stock option quotations for IBM. The last recorded price on the New York Stock Exchange for IBM shares was $ per Options are reported on IBM at exercise prices of $120 through $135.The exercise (or strike) prices bracket the stock price. While exercise prices generally are set at fivepoint intervals, larger intervals sometimes are set for stocks selling above $100, and intervals of $ may be used for stocks selling at low prices. If the stock price moves outside the range of exercise prices of the existing set of options, new options with appropriate exercise prices may be offered. Therefore, at any time, both inthemoney and outofthemoney options will be listed, as in this example.Figure shows both call and put options listed for each expiration date and exercise price. The three sets of columns for each option report closing price, trading volume in contracts, and open interest (number of outstanding contracts). When we pare prices of call options with the same expiration date but different exercise prices in Figure , we see that the value of a call is lower when the exercise price is higher. This makes sense, because the right to purchase a share at