Despite their intimidating complexity, put and call options are examples of the financial market’s growing ability to shield itself from unnecessary risk. As such, options allow producers and consumers to lengthen the time horizons of their plans and permit a better utilization of resources. By providing a standardized yet flexible method of reconfiguring financial exposure, they allow people in real markets to approach the theoretical ideal more closely. The result is a more efficient use of society’s resources to satisfy consumer desires. FULL ARTICLE The Social Function of Call and Put Options
Despite their intimidating complexity, put and call options are examples of the financial market’s growing ability to shield itself from unnecessary risk. As such, options allow producers and consumers to lengthen the time horizons of their plans and permit a better utilization of resources. By providing a standardized yet flexible method of reconfiguring financial exposure, they allow people in real markets to approach the theoretical ideal more closely. The result is a more efficient use of society’s resources to satisfy consumer desires. FULL ARTICLE All Rights Reserved ©
