Option pricing is calculated using the Black-Scholes model, which takes four influential factors into account: the price of an underlying stock (assuming constant drift and volatility), an option’s ...

In options trading, the extrinsic value of an option represents the portion of the option's price that's based on factors other than the immediate value of exercising it. Also known as “time value,” ...

High volatility signals a bullish outlook and creates new buying opportunities for traders while markets remain unpredictable ...

In options trading, assessing intrinsic and extrinsic value can help determine an option's price. Intrinsic value shows the profit from immediate exercise, while extrinsic value accounts for factors ...

Options trading can often be complex, but understanding how these financial instruments are priced is crucial for anyone diving into this market. Options derive their value from an underlying asset, ...

Options are a type of derivative, meaning they “derive” their value from the securities to which they are linked. Options are also leveraged, meaning a smaller amount invested in them can generate ...

James Chen, CMT is an expert trader, investment adviser, and global market strategist. Samantha (Sam) Silberstein, CFP®, CSLP®, EA, is an experienced financial consultant. She has a demonstrated ...

The trick, called stock options backdating, changed the date an option was granted to an earlier date when the stock price ...