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# Options

Options are highly leveraged finance instruments that change the risk profile of a stock. Under the right circumstances, option strategies offer a high rate of return.

Step 1:

A) Calculate the absolute change in closing prices as the data set.

B) Calculate the percentage change in closing prices as the data set.

Step 2:

C) Calculate the standard deviation of the data set.

D) Calculate the variance of the data set.

Step 3:

E) Multiply it by \( \sqrt{ 260} \).

F) Multiply it by \( \sqrt{365} \).

When would you want to early exercise an American call?

When would you early exercise an American put option on a stock that doesn't pay dividends?

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