RSM332 Option Prices Determinants
0.0(0)
Studied by 0 people0.0(0)
Call Kai
Learn
Practice Test
Spaced Repetition
Match
Flashcards
Knowt PlayCard Sorting
1/4
There's no tags or description
Looks like no tags are added yet.
Study Analytics
Name | Mastery | Learn | Test | Matching | Spaced |
|---|
No study sessions yet.
5 Terms
1
New cards
Future Stock Price (S)
S ↑ = Call ↑, Put ↓
2
New cards
Strike Price (X)
X ↑ = Call ↓ , Put ↑
3
New cards
Volatility (σ)
σ ↑ = Call ↑ Put ↑ (more chance to finish in-the-money)
4
New cards
Interest Rate (r)
r ↑ = Call ↑ (buy later is cheaper); Put ↓ (sell later is worse)
5
New cards
Time to Expiration (T)
T ↑ = Call ↑ Put ↑ (more time value); as time passes, Theta decay reduces option value
Note 
Flashcards (29)