Financial Daily from THE HINDU group of publications
Sunday, Aug 08, 2004
Financial Daily from THE HINDU group of publications Sunday, Aug 08, 2004 |
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Investment World
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Derivatives Markets Markets - Derivatives Markets Long-term options
Whether exchange traded equity options are issued by companies underlying them? The equity options traded on exchange are not issued by the companies underlying them. Companies do not have any say in selection of underlying equity for options. Whether the holders of equity options contracts have all the rights that the owners of equity shares have. Holder of the equity options contracts do not have any of the rights that owners of equity shares have - such as voting rights and the right to receive bonus, dividend etc. To obtain these rights a Call option holder must exercise his contract and take delivery of the underlying equity shares. What are Leaps (Long-Term Equity Anticipation Securities)? LEAPS or Long-term Equity Anticipation Securities are long-dated put and call options on common stocks or ADRs. These long-term options provide the holder the right to purchase, in the case of a call, or sell, in the case of a put, a specified number of stock shares at a pre-determined price up to the expiration date of the option, which can be three years in the future. (Source: www.bseindia.com)
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