Option expiration and price | Finance & Capital Markets | Khan Academy

Option Expiration and Price. Created by Sal Khan. Watch the next lesson: https://www.khanacademy.org/economics-finance-domain/core-finance/derivative-securities/forward-futures-contracts/v/forward-contract-introduction?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets Missed the previous lesson? Watch here: https://www.khanacademy.org/economics-finance-domain/core-finance/derivative-securities/put-call-options/v/actual-option-quotes?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets Finance and capital markets on Khan Academy: Options allow investors and speculators to hedge downside (or upside). It allows them to trade on a belief that prices will change a lot--just not clear about direction. It allows them to benefit in any market (with leverage) if they speculate correctly. This tutorial walks through option basics and even goes into some fairly sophisticated option mechanics. About Khan Academy: Khan Academy offers practice exercises, instructional videos, and a personalized learning dashboard that empower learners to study at their own pace in and outside of the classroom. We tackle math, science, computer programming, history, art history, economics, and more. Our math missions guide learners from kindergarten to calculus using state-of-the-art, adaptive technology that identifies strengths and learning gaps. We've also partnered with institutions like NASA, The Museum of Modern Art, The California Academy of Sciences, and MIT to offer specialized content. For free. For everyone. Forever. #YouCanLearnAnything Subscribe to Khan Academy’s Finance and Capital Markets channel: https://www.youtube.com/channel/UCQ1Rt02HirUvBK2D2-ZO_2g?sub_confirmation=1 Subscribe to Khan Academy: https://www.youtube.com/subscription_center?add_user=khanacademy

Comments

1. Hi Khan, Thank you for your great video tutorial. Do you know why the price of an option contract that expire in a week rise much more than an option that expire in a month? I.E.
   MSFT rise from $50 to $55. If you own MSFT option contract as below
   Your MSFT option contract Strike price $50 expire in a week earn $4
   But your MSFT option contract Strike price $50 expire in a month earn only 40 cents
2. something khan explains in 3 mins would take the normal lecturer 30 mins to explain..
3. awesome more videos like these would be greatly apreciated.
4. you are a life savior!
5. @DawnBreaker1100 Haha nice one, Id hire that guy for sure
6. Screw personal finance managers, hire Sal!
7. Great video!