How Option Pricing Works
Option prices (premiums) are influenced by several factors. The most important are:
Underlying Price: The current price of the stock/index.
Strike Price: The difference between the current price and strike determines moneyness.
Time to Expiry: The more time left, the higher the premium (time value).
Volatility: Higher volatility increases the premium since there’s a greater chance of price movement.
Interest Rates & Dividends: These also affect option pricing slightly.
A famous model called the Black-Scholes Model is commonly used to calculate theoretical option prices based on these factors.
Option prices (premiums) are influenced by several factors. The most important are:
Underlying Price: The current price of the stock/index.
Strike Price: The difference between the current price and strike determines moneyness.
Time to Expiry: The more time left, the higher the premium (time value).
Volatility: Higher volatility increases the premium since there’s a greater chance of price movement.
Interest Rates & Dividends: These also affect option pricing slightly.
A famous model called the Black-Scholes Model is commonly used to calculate theoretical option prices based on these factors.
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Contact : +91 7678446896
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Hello Everyone! 👋
Feel free to ask any questions. I'm here to help!
Details:
Contact : +91 7678446896
Email: skytradingmod@gmail.com
WhatsApp: wa.me/7678446896
Feel free to ask any questions. I'm here to help!
Details:
Contact : +91 7678446896
Email: skytradingmod@gmail.com
WhatsApp: wa.me/7678446896
Verbundene Veröffentlichungen
Haftungsausschluss
Die Informationen und Veröffentlichungen sind nicht als Finanz-, Anlage-, Handels- oder andere Arten von Ratschlägen oder Empfehlungen gedacht, die von TradingView bereitgestellt oder gebilligt werden, und stellen diese nicht dar. Lesen Sie mehr in den Nutzungsbedingungen.