耶鲁大学金融市场英文文本FinancialMarketsLecture23Transcript.docx

1、耶鲁大学金融市场英文文本FinancialMarketsLecture23TranscriptFinancial Markets: Lecture 23 Transcript Professor Robert Shiller: Today I want to talk about options. I should just say what an option is. Ill write the word. Its a contract that has an owner and the owner of the option contract has rights to find in t

2、he contract either to buy or sell some thing-lets say a share of stock-at a specified price and specified date. There are two kinds; theres a put and a call. A put option is the right to sell. Its typically a hundred shares, so well say a hundred shares of a company; lets say its Google. The option

3、would have-if it was a put option and there was a price, then you would have the right up-let me see, theres the exercise price, also known as the strike, and theres the exercise date. I should also emphasize that there are two kinds of options. There are American, so called, and European, so called

4、. It has nothing to with whether they are in America or Europe because in Europe they trade both American options and European options and in America they trade both American options and European options; so, its very unfortunate terminology. The American-what this means-an American option means the

5、 right to exercise the option on any date until and including the exercise date; with European, its only on exercise date. Thats what those words mean. So, usually were talking about American options. If you have an American option-American put option-on shares of some stock, then you have the right

6、 anytime you feel like it, until the exercise date, to sell that option at the price specified in the contract, called the exercise price. If its European, you have to wait until the exercise date and then you have one day when you can do that. A call option is the right to buy a share of stock or w

7、hatever it is-whatever is specified in the option. In a traditional option, there are two parties; theres the buy of the option and usually we present them from the perspective of the buyer of the option. The buyer of the option pays a price to buy the option-not to be confused with the exercise pri

8、ce-and then, depending on whether its American or European, has until the exercise date to exercise the option; but, the buyer doesnt have to do anything. You can just do nothing; you can buy the option and if you do nothing it becomes worthless because the only way the option ever gives you value a

9、fter you buy it is if you exercise it, meaning you say, I will use my right to buy or sell. The other party is the writer of the option. Because its a contract, it has to be between two parties. Somebody is on the other side and you can do either one; you can either buy or write an option. If you-le

10、t me make this clear; if you write a call option, then what you are committing yourself to do as the writer-you sign the contract from the writers contract, which goes along with the buyers contract. Well, it provides rights to the buyer. If you write a call option, then you-and say its American-the

11、n you are signing a contract -lets say its on stock-to deliver one hundred shares to the other guy, the buyer, whenever that guy feels like it. That guy will pay you the contracted price, so its not-it doesnt seem like much fun to be a writer of an option because you have-youre just sitting there wa

12、iting for this other person to make up his or her mind. Theres a benefit; mainly, you get the money. The buyer of the option pays you up front for providing this right to the buyer, so writers of options write them hoping that they expire unexercised; thats when they make money. If you write an opti

13、on and the buyer of the option pays you the money up front and then you never hear from the buyer again, then youre-thats the way you like it. So, you make money by writing options and hoping that they dont get exercised. Of course, you can write a put option and that means-if you write a put option

14、, you are signing a contract that says that whenever this other guy on the other side, the buyer, decides to, that guy will sell you a hundred shares at the specified price. Again, youre laying yourself open to, whenever this guy wants to, youve got to receive a hundred shares and pay the money. Now

15、, these kinds of contracts are very old and, in fact, we had a conference over the weekend at the Yale School of Management on-it was a very interesting-Ive never experienced anything quite like it. Maybe I should put the website up for you to look at. Theres a book; its called The Great Mirror of F

16、olly, written in 1720 about the stock market and the Beinecke Rare Book Library has a copy of it. Theyre very rare-about the stock market crash of 1720. Did you know that there was a big stock market crash in the year 1720? What was happening in New Haven in 1720? Well, I know one thing that was happening in 1720 in New Haven-Im guessing; Im pretty sure. You had some pretty angry investors who lost everything in the s