P235 CJJFAX 235 Tue 30 May 19:12/15 ^ [ T $radjd optNens cRnf r n right t bu r sell it0 -4 shnreK, et ed and Sinhin a fi ed p ind. a 2 At L FF bgj 9 I trad d g age avbilab e on m1 tha 7n FT eqaitiez a d o t -S index are 2 2 2 20 2 n oy nk e o a CLnSKNG KNDICJS ppbp p dtp p d Far East aid e 0 24 p 2 2222 22 20 All ion on marks s rd2slodid rwu the bhan e t i favm i inj r fal no Murk s. #M SHARE HECK 220 2LHE prices 258 STE jXX 1 A0+1vl0Sz Gi HP235 CEEFAX 235 Tue 30 May 19:12/47 ] 2/6 ALL ABOUT OPTIONS £££££ £ ££ ££ £ rad options com in two hap "callsb and "put2b. -he buyer of a call option has thu right but not the obligation to buy a fixed number of share3 at a fixed price before a set date. $hj buyer of a put option has the ight b t not th ob ig tion sell under the same limitations. Individual equity options may only b dealt i whol cont act , ch j of which normally represents an option on 1, 00 gf the undjulyjn7 3hbres, e.g. 1,000 XZZ shares. Options index 230 Headline3 201P235 CEEFAX 235 Tue 30 May 19:18/44 ] 3/6 '/.%/. /, /, Fhj fixed pricd at which a holder cog o und n sh res i kn n as h "exercise price". 2 hj a s t at l a , and ab h c r t hat psi . Ea5is p ib s h l i 24, cycles hyagj 230). t hue xp r options ar quoted at j bj on a an/ipr/J l/ ct cycl , with threm months quoted f u tr di g. prions index 230 HEadlines 201 Marge ir t pt F -S 100 Cit H adsP235 CEEFAX 235 Tue 30 May 19:10/59 ] / Premiums in XYZ may bj quotdd thus, when the shares stand at 254p. b CALL3 PUTS an J l J l XZZ 240 25 35 42 6 10 12 *254 460 14 24 31 14 18 20 280 7 15 23 27 29 30 Here, the premium for the January 4 call i 2 s c nf s the rSght to buy 1,000 XYZ shakes at 240p up to the January expiry datd. So a contract is £250 (25p | 1009). Options index 230 Headlines 201P235 CJJFAX 235 Tue 30 May 19:11/28 l |l | ALL =BOUT OPTIONS .%/.%/, /, Buying traded options invom6es a the option, which is a fraction kf the shaka pric . Cjefax displays psi es of options on bo h indi u l t a d the FT-S 0 ind x. CradId options on h index op rate on similar lines to equit8 options. They are cash-5ettled gn the ba3is of £10 per index point. So the co t of one index option contract is £10 x the premium. Options in 22 3 LHE dlines 20 Markets First Opt FT-SE 100 C tFHeadP235 CEEFAX 235 Tue 30 May 19 14/49 6/6 ALL ABOUT OPTIONS LL Further details are available in a LJFFE booklet, An Introduction to Krujty and Index Options, avbilable free of charge from: 2 p p Kirsty Grant Equity PrgductQ Ddpartmjnt LIFFE Cannon Bridge London EC4R 3XX Tel. 0171-379 2486 2 Genital enruiries may bj addressed to Tony Haweu or Kaly Thavarajah in h t at LIFFE on tel. 0171-579 2442. Options index 230 SHARECHECK 220