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Published on 21 Mar 2011 | over 6 years ago

Arbitrage Basics. Created by Sal Khan.

Watch the next lesson:
www.khanacademy.org/economics-finance-domain/core-finance/derivative-securities/put-call-options/v/put-call-parity-arbitrage-i

Missed the previous lesson? Watch here:
www.khanacademy.org/economics-finance-domain/core-finance/derivative-securities/put-call-options/v/call-writer-payoff-diagram

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.

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