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Many ways, but one of the most famous is the Black Scholes Option Formula, from a paper published in 1973 by Fischer Black and Myron Scholes entitled, "The Pricing of Options and Corporate Liabilities."
It's not for the faint of heart though, and even that by today's standards would be considered very simplistic (Although still very usable.)
While developing my option pricing software I recruited help from economics graduate students from The Haas School of Business Berekley California. They were invaluable.
What else can I help you with?
What are the key differences between a European option and an American option?
The main difference between a European option and an American option is the exercise or strike price. In a European option, the option can only be exercised at the expiration date, while in an American option, the option can be exercised at any time before the expiration date.
How is the option premium taxed?
The option premium is taxed as a capital gain when the option is sold or expires.
How do you determine whether the currency option is in the money?
"In the Money" is a term used in option trading as a determinate to if an option has "Intrinsic Value." In the Money, does NOT mean in profit. There are two components to an option value, TIME VALUE, and INTRINSIC VALUE. Time Value + Intrinsic Value = Option Premium. When the market price is above the option strike price of a CALL option, that option is considered "In the Money" i.e. having intrinsic value. When the market price is below the option strike price of a PUT option, that option is considered "In the Money" i.e. having intrinsic value.
How can one exercise a call option?
To exercise a call option, the option holder can buy the underlying asset at the strike price before the option's expiration date.
How does a European option differ from an American option?
A European option can only be exercised at the expiration date, while an American option can be exercised at any time before the expiration date.
What is the verb for valuable?
A verb for valuable could be valuate. As in "to valuate the worth of an item".
What does valuate mean in math?
Find the numerical value of.
How do you value an easement?
The customary way of appraising an easement to is valuate the land as if unencumbered by the easement and the land as encumbered; the difference between the two values is the value of the easement.
Where can one get a domain appraisal?
There are several companies that offer domain appraisal services. Some of the places that offer domain appraisals include Valuate, Sedo, and Afternic.
What information does earned value management project?
Earned Value Management (EVM) is a technique used to measure progress. It is used in project management to identify work, valuate and quantify the work.
What is the value of 30 Remington 1912 carbine?
The condition of the good will determine its value. Depending on its condition, the price will range between $275 and $700. Find someone to valuate your gun before selling it.
How to valuate a beverage company?
A beverage company is a company selling mostly goods. As such, a valuation will often involve not only the investors' shares, but also some general measurement of the average cash flows from the beverages sold.
What is an option buy?
An option buy is when you buy an option, whether call option or put option, using the Buy To Open order.
Is call option and buy option are same or not?
As far as I know there isn't a "buy option," but a call option is an option to buy so I guess you could think of it as a "buy option."
What are Actions that start with v?
* vacate * vacuum * vail * validate * valorize * valuate * vamoose * vandalize * vanish * victimize * vows also vaporizations, vibrations, voyages, volleys, vacillations, vaults ( as in pole-vaulting ), vendettas, victories
Euthanasia is not an option?
what are you on about euthenasia is sometimes the only option what am I on about ITS THE ONLY OPTION
What is the value of a model 70 FW 257 Roberts?
Good ay, There is more info needed to valuate any rifle. What year was it made? What condition is the rifle in? Is there a box and paperwork with it? Etc., etc. I'd be happy to help you find out. Regards, Jonathan
