␡
- What Is an Option?
- Strike Price
- Intrinsic and Extrinsic Value: Components of an Option Price
- Intrinsic Value
- Extrinsic Value
- Time Value
- Volatility
- Demand
- The Art of Option Trading
This chapter is from the book
Intrinsic and Extrinsic Value: Components of an Option Price
The value of any given option is composed of two components:
- Intrinsic value
- Extrinsic value
Option Price=Intrinsic Value+Extrinsic Value