On October 19, 1987, the stock market (as measured by the Dow Jones Industrial Average) lost almost
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On October 19, 1987, the stock market (as measured by the Dow Jones Industrial Average) lost almost onequarter of its value in a single day. Nevertheless, some traders made a profit buying call options on the stock index and then liquidating their positions before the market closed. Explain how this is possible, assuming that it was not a case of the traders taking advantage of spurious upward ticks in stock prices.
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Related Book For
Investment Analysis And Portfolio Management
ISBN: 9780176500696
1st Canadian Edition
Authors: Frank K. Reilly, Peggy L. Hedges, Philip Chang, Keith C. Brown, Hedges Reilly Brown
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