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  2. Valuation of options - Wikipedia

    en.wikipedia.org/wiki/Valuation_of_options

    In finance, a price (premium) is paid or received for purchasing or selling options.This article discusses the calculation of this premium in general. For further detail, see: Mathematical finance § Derivatives pricing: the Q world for discussion of the mathematics; Financial engineering for the implementation; as well as Financial modeling § Quantitative finance generally.

  3. Monte Carlo methods for option pricing - Wikipedia

    en.wikipedia.org/wiki/Monte_Carlo_methods_for...

    The first application to option pricing was by Phelim Boyle in 1977 (for European options). In 1996, M. Broadie and P. Glasserman showed how to price Asian options by Monte Carlo. An important development was the introduction in 1996 by Carriere of Monte Carlo methods for options with early exercise features.

  4. Binomial options pricing model - Wikipedia

    en.wikipedia.org/wiki/Binomial_options_pricing_model

    In finance, the binomial options pricing model (BOPM) provides a generalizable numerical method for the valuation of options.Essentially, the model uses a "discrete-time" (lattice based) model of the varying price over time of the underlying financial instrument, addressing cases where the closed-form Black–Scholes formula is wanting.

  5. Options strike prices: What they are and how they work - AOL

    www.aol.com/finance/options-strike-prices...

    It’s the price at which you can buy or sell.

  6. The option Greeks: The key factors that move option prices - AOL

    www.aol.com/finance/option-greeks-key-factors...

    The option Greeks help traders anticipate movements in options prices, and savvy traders need to understand and keep an eye on how these metrics reflect pricing. Understanding the Greeks can help ...

  7. 5 options trading strategies for beginners - AOL

    www.aol.com/finance/5-options-trading-strategies...

    If the stock closes below the strike price at option expiration, the trader must buy it at the strike price. Example: Stock X is trading for $20 per share, and a put with a strike price of $20 and ...

  8. Option (finance) - Wikipedia

    en.wikipedia.org/wiki/Option_(finance)

    The market price of an American-style option normally closely follows that of the underlying stock being the difference between the market price of the stock and the strike price of the option. The actual market price of the option may vary depending on a number of factors, such as a significant option holder needing to sell the option due to ...

  9. Finite difference methods for option pricing - Wikipedia

    en.wikipedia.org/wiki/Finite_difference_methods...

    Finite difference methods were first applied to option pricing by Eduardo Schwartz in 1977. [2] [3]: 180 In general, finite difference methods are used to price options by approximating the (continuous-time) differential equation that describes how an option price evolves over time by a set of (discrete-time) difference equations.

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