Hollywood Stock Exchange - Options & Derivatives

Options & Derivatives

A movie option may be either a "call" or a "put." A call is claiming that the movie will make more than a certain amount for its opening week, and a put is claiming that it will make less than that amount. For example, suppose there is a H$10 million call and put for the opening weekend total of a movie called Rosebud. If Rosebud makes US$20 million in its opening weekend, those who called Rosebud at H$10 million will receive H$10 for each share of the Rosebud call that they purchased, and those with a put would lose the money they invested. If Rosebud made US$5 million, those with the put would receive H$5 a share and those with a call would earn nothing. Options were renamed as derivatives in June 2006.