Learn how option premiums are determined by factors like stock price, time to expiration, and volatility. Master the basics to trade options wisely and confidently.

Learn About an Important Method for Valuing Derivatives and Other Assets Gordon Scott has been an active investor and technical analyst or 20+ years. He is a Chartered Market Technician (CMT). Timothy ...

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 ...

Monte Carlo simulations have become a cornerstone in quantitative finance, particularly in the pricing of complex options and in modelling volatility dynamics. This numerical method employs random ...

American options, which allow early exercise at any point prior to expiry, present a unique challenge in quantitative finance. Their valuation gives rise to free-boundary problems that are typically ...