Option Pricing: Why Premium Changes
Premium is the price paid by the option buyer. It depends on:
1. Intrinsic Value
Value if exercised today.
2. Time Value
More time → more chances of profit → higher premium.
3. Volatility (IV – Implied Volatility)
When volatility increases, option premiums rise.
4. Supply & Demand
High demand increases option prices.
5. Interest Rates & Dividends
These have minor impact but still matter for pricing models.
Premium is the price paid by the option buyer. It depends on:
1. Intrinsic Value
Value if exercised today.
2. Time Value
More time → more chances of profit → higher premium.
3. Volatility (IV – Implied Volatility)
When volatility increases, option premiums rise.
4. Supply & Demand
High demand increases option prices.
5. Interest Rates & Dividends
These have minor impact but still matter for pricing models.
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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
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
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
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.