Factors Influencing Option Prices

A

abhishreshthaa

Abhijeet S
SOME FACTORS WHICH INFLUENCE OPTION PRICES ARE :

  • Price of the underlying asset

  • Strike Price

  • Volatility ( Historical & Implied Volatility )

  • Time to Expiry

  • Interest Rates &

  • Dividends


STRIKE PRICE

The value of a call option increases with decline in strike price and decreases with an increase in strike prices


Stock Price

  • The value of a put option decreases with a increase in strike price and increases with a decrease in strike prices

  • When the call option is exercised in future, the net flow will be the amt by which stock price exceeds strike price.

  • As the stock price rises, the value of a call rises and vice-versa

  • The value of a put reacts in the opposite manner as that of call
 
abhishreshthaa said:
SOME FACTORS WHICH INFLUENCE OPTION PRICES ARE :

  • Price of the underlying asset

  • Strike Price

  • Volatility ( Historical & Implied Volatility )

  • Time to Expiry

  • Interest Rates &

  • Dividends


STRIKE PRICE

The value of a call option increases with decline in strike price and decreases with an increase in strike prices


Stock Price

  • The value of a put option decreases with a increase in strike price and increases with a decrease in strike prices

  • When the call option is exercised in future, the net flow will be the amt by which stock price exceeds strike price.

  • As the stock price rises, the value of a call rises and vice-versa

  • The value of a put reacts in the opposite manner as that of call
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hey abhi,

Here I am sharing Notes on Factors Affecting Option Prices, so please download and check it.
 

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