4.3a Derivative instruments - derivatives in the Black Scholes framework

This paper sets the scene for the rest of this series and covers:

·        What a derivative is

·        Trading strategies based around payoff diagrams

·        A common investment structure seen in practice

·        Put-call parity

·        Other option price bounds

·        Why are derivative models needed?

·        Practicalities

·        Recap of key ideas

·        Background to Black Scholes

The paper has 18 pages and the Excel has 1 sheet