Stock Options Pricing And Stock Information

Believe me, learning about options and related stock information can be very overwhelming…at first. In fact, before jumping into the various strategies, it’s important that you have a firm understanding on how options are priced. So, let’s get specific. Stock options are priced using a mathematical model, the most famous being the Black-Scholes-Merton model.   But don’t worry.  The focus here will be on the determinants of an option value, not the math. How to properly price an option In order to properly price an option, one must know the current stock price, strike price, time to expiration, stock volatility, interest rates and cash dividends.  Let’s look at some examples and see how these factors and stock information influence the price of an option. Current Stock Price As the stock price

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