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    Finance

    Advantages of Options

    The advantages of options trading are as follows: 1. Risk Management: Put options allow hedging against a possible fall in the value of shares one...

    Option Payoff Values

    An option’s payoff defines as the price an investor would be willing to pay for the option the instant before it expires. An option’s payoff...

    Put-Call Parity

    Put-call parity is a financial relationship between the price of a put option and a call option with the same characteristics (strike price and...

    Determinants of Option Pricing

    The price at which the stock under option may be put or called is the contract price. Sometimes, it is referred to as the striking...

    Components of Options Pricing

    The total value of an option consists of intrinsic value, which is simply how far in-the-money an option is, and time value, which is...

    Introduction to Options Pricing

    Option price or option premium is the amount per share that an option buyer pays to the seller. The premium is the price at which...

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