18. Notation#
In the notes we use the notation described in the table below.
Variable |
Description |
|---|---|
\(S\) |
Current stock or spot price of the asset |
\(F\) |
Forward or futures price |
\(K\) |
Strike price of the option |
\(T\) |
Time to expiration of the forward, futures, option |
\(S_{T}\) |
Stock price or spot price at expiration date |
\(r\) |
Continuously compounded risk-free rate |
\(q\) |
Continuously-compounded dividend or convenience yield |
\(D\) |
Present value of dividends during the life of the contract |
\(C\) |
Value of European call option to buy one share of the stock |
\(P\) |
Value of European put option to buy one share of the stock |
\(\Cam\) |
Value of American call option to buy one share of the stock |
\(\Pam\) |
Value of American put option to buy one share of the stock |