Pricing Models

Learn various option pricing models used to quantify the value of options. This section reviews the inputs used in the various pricing models and the mathematical outputs they produce.

The Foundations of Options Pricing

The options market has its own set of unique characteristics when it comes to pricing. This rebroadcast of an OIC webinar will help build your knowledge by reviewing the various factors that impact the price of an option.

6:05) - Options Pricing Basics
(9:39) - Supply and Demand
(15:59) - Black Scholes
(21:10) - Cox-Ross Rubenstein
(26:30) - "Moneyness" of Options
(33:14) - Intrinsic vs. Extrinsic Value

Understanding Options Pricing

A number of factors affect the price of an option - and it's important to have an understanding of them.

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Theoretical Option Pricing

This webinar takes the topic of options pricing to the next level.

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Dividend Considerations for Option Traders

Review possible ways dividend payments affect exercise decisions and the importance of becoming a shareholder before the ex-dividend date.

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Corporate Actions: Forward Splits

A forward stock split increases the number of outstanding shares while reducing the price per share proportionally - but what does this mean for option holders?

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Calculating Implied Forward Prices

Use three data points (call price, put price, strike) to determine what the market is pricing for future stock values. Step-by-step examples show how to calculate where options imply the underlying will trade.

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