Option value: related pages
Out of the money
An option is out of the money if it has negative intrinsic value.
At the money
An option is at-the-money if the strike price equals the exercise price.
Black-Scholes
The most widely used method of option valuation. More complex models are sometimes necessary as it uses a number of simplifying assumptions.
Intrinsic value
The amount of money an option would make by exercising it immediately; the price difference between the strike price and the price of the underlying.
Option
The right to buy or sell an asset at a pre-arranged price.
Real option
The option value created by the freedom to act in the future of a choice now.
Embedded option
An option that is part of another security. It does not trade by itself, but it does affect the value of the security of which forms a part.
Copyright Graeme Pietersz © 2005-2019
