Valuation of Options—How are options priced?
@Tiger_Academy:
In the previous session, we covered the six elements of an option contract, namely: underlying assets, option type, expiration date, strike price, premium, and contract size.We usually say that the value of a stock ultimately depends on the profitability of the company. What then does the value of the option depend on?In this session, we will talk about factors that affect the value of an option.Let's take a look at Tesla's option chain.At the moment, Tesla's share price stands at USD 1,160. We can see that even when call options have the same expiration date, the premiums of the contracts vary greatly depending on the different strike prices. What is the reason behind this? If we scroll to the left, we can see this column: intrinsic value and time value. What are the characteristics of th