Explain the difference between an american option

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1.  Listed below are four basic option positions.  Two of these are generally bearish and two are bullish.  Put them in the correct column.

buy a call write a call buy a put write a put

BEARISH BULLISH

_______________ _______________

_______________ _______________

2.Explain the difference between an American option and a European option.

3.How do index options simplify the process of option overwriting with large portfolios?

4.Give an example of a circumstance in which you feel writing an individual equity call option would be preferable to writing an index option.

Reference no: EM13515569

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