Options can be generalized as contracts that can be bought at a given price enabling one to buy or sell an asset or security at a possible future profit. If the profitable opportunity does not arise, the price paid for the option is foregone. An understanding of the theory and analysis of options is useful to the financial managers in enabling them to estimate trends and may be employed to temporarily secure assets until a decision is made whether to buy or not and to hold on to new projects or innovations until a final decision.
- Bookstaber, R. (1981). Option pricing and strategies in investing. Reading, MA: Addison-Wesley Publishing.Google Scholar
- Bookstaber, R. (1987). Options pricing and investing strategies. Chicago: Probus Publishing.Google Scholar
- Galai, D. (1977). Tests of market efficiency of the Chicago Board of Options Exchange. Journal of Business, 50, 167–197.Google Scholar
- Malkiel, B. G., & Quandt, E. (1969). Strategies and rational decisions in the securities options market. Cambridge, MA: MIT Press.Google Scholar
- Merton, R. (1974). On the pricing of corporate debt: The risk structure of interest rates. Journal of Finance, 29, 449–470.Google Scholar
- Sharpe, W. F. (1978). Investments. Englewood Cliffs, NJ: Prentice-Hall.Google Scholar
- Sprenkle, C. M. (1961). Warrant prices and indicators of expectations and preferences. Yale Economic Essays, 1, 179–231.Google Scholar