When other conditions are fixed, the value of call options will increase with the increase of the market price of the underlying assets; The value of put option decreases with the increase of the market price of the underlying asset.
2. Execution price
Other things being equal, the higher the exercise price of the call option, the smaller the value of the option; The higher the strike price of the put option, the greater the value of the option.
3. Maturity
For American options, whether put options or call options, the longer the maturity time, the higher the maturity value of options. But please note that this conclusion may not hold true for European options. First, options with a longer term will not increase the chances of execution than options with a shorter term; Second, long-term call options may lead to value deduction due to the cash dividend of the underlying stock.
Extended data
The value of options mainly consists of the following two kinds of values:
Option value = embedded value+time value.
embeded value
The connotative value of option refers to the part of the option price that reflects the relationship between the final option price and the current futures price. As far as long options are concerned, its connotation value is the value that the current futures price is higher than the option transaction price.
trend of the times
The time value of option refers to the time value of option. For example, the option price of a long option is 9, the exercise price is 75, and the futures price at that time is 78, so the connotation value of the option is 3, that is, 78-75, and the time value is 6, that is, 9-3. The time value of options not only reflects the time risk during option trading, but also reflects the risk of market price changes.
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