Current location - Trademark Inquiry Complete Network - Futures platform - What are the main influencing factors of option pricing?
What are the main influencing factors of option pricing?
The influencing factors of option pricing are as follows:

Strike price: The strike price of an option is an important part of an option contract. It sets the option price for buying or selling the underlying assets. The lower the exercise price, the higher the call option price and the lower the put option price, and vice versa.

Price of the underlying asset: The price of the option is affected by the price of the underlying asset. The higher the underlying asset price, the higher the call option price and the lower the put option price, and vice versa.

Maturity time: the remaining term of the option is also one of the important factors affecting the option price. The longer the remaining term of the option, the higher the price of the call option and the lower the price of the put option, because there is more time for the underlying asset price to rise.

Volatility: Volatility is an indicator to measure the price changes of the underlying assets. The higher the volatility, the higher the option price, because the higher the volatility width ratio makes the price of the underlying asset more uncertain, thus making the option contract more valuable.

Risk-free interest rate: the option price is also affected by the risk-free interest rate. The higher the risk-free interest rate, the higher the price of call option and the lower the price of put option, because high interest rate will increase the opportunity cost of option.

Dividend: For stock options, dividend is also one of the factors that affect the option price. High dividend means that the company's dividend policy has an inhibitory effect on the stock price, so the call option price decreases and the put option price increases.

These factors need to be considered when calculating the option price through Black-Scholes pricing model or other derivative pricing models.