DB260116C00018000 Option on Deutsche Bank AG

An 'In The Money' option is one with a strike price that the current stock price has already surpassed. Some options investors can hedge their Deutsche Bank positions using in-the-money options. They may also want to buy options with some intrinsic value, not just time value. However, because in-the-money options on Deutsche Stock have intrinsic value and are priced higher than out-of-the-money options in the same chain, their volatilities are relatively smaller.

Put options written on Deutsche Bank grant holders of the option the right to sell a specified amount of Deutsche Bank at a specified price within a specified time frame. The put buyer has a limited loss and, while not fully unlimited gains, as the price of Deutsche Stock cannot fall below zero, the put buyer does gain as the price drops. So, purchasing a put option on Deutsche Bank is like buying insurance aginst Deutsche Bank's downside shift.

By selling Deutsche Bank's put option, the investors signal their bearish sentiment. A short position in a put option written on Deutsche Bank will generally make money when the underlying price is above the strike price. Therefore Deutsche Bank's put payoff at expiration depends on where the Deutsche Stock price is relative to the put option strike price. The breakeven price of 18.0 is the critical point that divides the payoff function into two parts. Below the breakeven price, the payoff is dropping and negative (the seller makes a loss). Above the breakeven price, the payoff line is upward sloping as the option payoff increases in proportion to Deutsche Bank's price. Finally, at the strike price of 18.0, the payoff chart is constant and positive.

Deutsche Bank's option chain is a display of a range of information that helps investors for ways to trade options on Deutsche. In general, an option chain provides a helpful tool for investors to see all available option contracts, both puts, and calls, for Deutsche. It also shows strike prices and maturity days for a Deutsche Bank against a given expiration period. The table below combines all the option information in the form of a chain but before you use it, remember that it entails significant risk and it is not for everyone.

Check out Investing Opportunities to better understand how to build diversified portfolios, which includes a position in Deutsche Bank AG. Also, note that the market value of any company could be closely tied with the direction of predictive economic indicators such as signals in bureau of labor statistics. You can also try the Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.

Is Diversified Capital Markets space expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Deutsche Bank. If investors know Deutsche will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Deutsche Bank listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.

The market value of Deutsche Bank AG is measured differently than its book value, which is the value of Deutsche that is recorded on the company's balance sheet. Investors also form their own opinion of Deutsche Bank's value that differs from its market value or its book value, called intrinsic value, which is Deutsche Bank's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Deutsche Bank's market value can be influenced by many factors that don't directly affect Deutsche Bank's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.

Please note, there is a significant difference between Deutsche Bank's value and its price as these two are different measures arrived at by different means. Investors typically determine if Deutsche Bank is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Deutsche Bank's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.