An approach that calculates the value of an option. The primary types of theories on the pricing of options have large margins for error as their values are determined from other assets. Another factor in options pricing is time. Therefore, options that are marketable need different methods of valuation than those that are non-marketable.
Related information about option pricing theory:
- Option Pricing Theory Definition | Investopedia
Any model- or theory-based approach for calculating the fair value of an option. The most commonly used models today are the Black-Scholes model and the ...
- Option Pricing Theory and Applications
What is an option? ○ An option provides the holder with the right to buy or sell a specified quantity of an underlying asset at a fixed price (called a strike price or ...
- Peter Carr - "FAQ's in Option Pricing Theory" - New York University
We consider several Frequently Asked Questions (FAQ's) in option pricing theory. This paper has benefitted from the comments received during presentations ...
- Option Pricing Theory
Options have existed—at least in concept—since antiquity. It wasn't until publication of the Black-Scholes (1973) option pricing formula that a theoretically ...
- Black–Scholes - Wikipedia, the free encyclopedia
The Black–Scholes model /ˌblæk ˈʃoʊlz/ or Black–Scholes–Merton is a mathematical model of a financial market containing certain derivative investment ...
- Valuing Risky Projects: Option Pricing Theory and Decision Analysis
option pricing techniques to problems with incomplete securities markets. ( Valuation; Option Pricing Theory; Decision Analysis). 1. Introduction. In the usual MBA ...
- Applications of Option-Pricing Theory: Twenty-Five Years Later
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- Liquidity Risk and Option Pricing Theory
on the inclusion of liquidity risk into option pricing theory, and the recent of results of Blais and Protter [4] and [5] where these results are interpreted through an ...