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Options: Factors Affecting Option Value
Updated Jul 26, 2024
What you'll learn
- We look at the main factors here; the interest rate, the relationship between the strike and the underlying asset price, the time left to maturity of the option, and the volatility of the underlying asset.
Course Description
The value of an option is affected by a number of factors, and each of them has to be taken into account when pricing an option, regardless of the pricing model used. We look at the main factors here; the interest rate, the relationship between the strike and the underlying asset price, the time left to maturity of the option, and the volatility of the underlying asset.
