In a three-month down-and-out call option on silver futures, the strike price is $20 per ounce and
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In a three-month down-and-out call option on silver futures, the strike price is $20 per ounce and the barrier is $18. The current futures price is $19, the risk-free interest rate is 5%, and the volatility of silver futures is 40% per annum. Explain how the option works and calculate jts value. What is the value of a regular call option on silver futures with the same terms? What is the value of a down-and-in call option on silver futures with the same terms?
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