use of call_and_put_options

Jun 28th, 2015
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A “Put Option” as understood in common parlance is an option to sell. A “Put Option” is an Investor’s exit/liquidity option by way of which an Investor can, on the happening of a “Put Trigger” event, compel the promoter/ shareholder of Company to buy its shares either wholly or partly, at a valuation, agreed between the parties. A “Put Option” has become a popular exit option in business practice and has found expression by way was a “Put Option” Clause in Share Holders Agreement (SSA) or Share Subscription Agreements (SHA). This right to sell is not vested in a shareholder by way of law but is a creation of contractual arrangement between the parties. Thus if “Put Option” is not provided in the SSA or SHA then the investor/ shareholder cannot exercise such right to sell.

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An Empirical Examination of the Pricing of American Put OptionsAuthor(s): Edward C. Blomeyer and Herb JohnsonReviewed work(s):Source: The Journal of Financial and Quantitative Analysis, Vol. 23, No. 1 (Mar., 1988), pp. 1322Published by: University of Washington School of Business AdministrationStable URL: http://www.jstor.org/stable/2331020 .Accessed: 07/05/2012 09:53Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at .http://www.jstor.org/page/info/about/policies/terms.jspJSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range ofcontent in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new formsof scholarship. For more information about JSTOR, please contact support@jstor.org.University of Washington School of Business Administration is collaborating with JSTOR to digitize, preserveand extend access to The Journal of Financial and Quantitative Analysis.http://www.jstor.orgANDQUANTITATIVEANALYSISJOURNALOF FINANCIALAnEmpiricalPutOptionsEdwardExaminationC. Blomeyerandof theVOL.23,NO. 1,MARCH1988Pricingof AmericanHerb Johnson*AbstractThis studyis an expost performancetestcomparingthe accuracy of an Americanmodel toa European model forvaluing listed options. Specifically, the Geske and JohnsonAmeri?can put valuation model is compared withthe Black and

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