How Option Pricing Works
The price (premium) of an option is influenced by several factors, collectively known as the “Option Greeks”:
Delta: Measures how much the option price changes with a ₹1 change in the underlying asset.
Gamma: Indicates the rate of change of Delta.
Theta: Represents the time decay of the option’s value as it approaches expiry.
Vega: Measures sensitivity to volatility.
Rho: Indicates sensitivity to interest rate changes.
Additionally, the volatility of the underlying asset and time to expiry play crucial roles in determining option prices. Higher volatility increases the premium, as uncertainty boosts the potential for profit.
The price (premium) of an option is influenced by several factors, collectively known as the “Option Greeks”:
Delta: Measures how much the option price changes with a ₹1 change in the underlying asset.
Gamma: Indicates the rate of change of Delta.
Theta: Represents the time decay of the option’s value as it approaches expiry.
Vega: Measures sensitivity to volatility.
Rho: Indicates sensitivity to interest rate changes.
Additionally, the volatility of the underlying asset and time to expiry play crucial roles in determining option prices. Higher volatility increases the premium, as uncertainty boosts the potential for profit.
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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
Pubblicazioni correlate
Declinazione di responsabilità
Le informazioni e le pubblicazioni non sono intese come, e non costituiscono, consulenza o raccomandazioni finanziarie, di investimento, di trading o di altro tipo fornite o approvate da TradingView. Per ulteriori informazioni, consultare i Termini di utilizzo.