Options Markets - Pricing, Purposes, and Applications

Explore the fundamentals of options markets in this comprehensive lecture from Yale University's Financial Markets course. Delve into core concepts including call and put options, the put-call parity, and option pricing models like the Binomial Asset Pricing model and Black-Scholes formula. Examine the theoretical and behavioral purposes of options, analyze graphical representations of option values, and understand the role of derivatives markets. Investigate the concept of implied volatility through the VIX index and compare it to actual market volatility. Conclude with insights into innovative applications of options in the housing market, providing a thorough understanding of this crucial financial instrument.

- Chapter 1. Examples of Options Markets and Core Terms .
- Chapter 2. Purposes of Option Contracts .
- Chapter 3. Quoted Prices of Options and the Role of Derivatives Markets .
- Chapter 4. Call and Put Options and the Put-Call Parity.
- Chapter 5. Boundaries on the Price of a Call Option.
- Chapter 6. Pricing Options with the Binomial Asset Pricing Model.
- Chapter 7. The Black-Scholes Option Pricing Formula.
- Chapter 8. Implied Volatility - The VIX Index in Comparison to Actual Market Volatility.
- Chapter 9. The Potential for Options in the Housing Market.