# Options premium explained

The term "call" comes from the fact that the owner has the right to "call the stock away" from the seller. Trading options involves a constant monitoring of the option value, which is affected by the following factors:. Energy derivative Freight derivative Inflation derivative Property derivative Weather derivative. This page was last edited on 30 Marchat options premium explained

Unsourced material may be challenged and removed. Energy derivative Freight derivative Inflation derivative Property derivative Weather derivative. Importantly, the Black-Scholes formula provides an estimate of the price of European-style options.

The seller or "writer" is obligated to sell the commodity or options premium explained instrument to the buyer if the buyer so decides. The buyer pays a fee called a premium for this right. The most options premium explained method used is the Black—Scholes formula. This article is about financial options. Importantly, the Black-Scholes formula provides an estimate of the price of European-style options.

Energy derivative Freight derivative Inflation options premium explained Property derivative Weather derivative. From Wikipedia, the free encyclopedia. Trading options involves a constant monitoring of the option value, which is affected by the following factors:. The seller or "writer" is obligated to sell the commodity or financial instrument to the buyer if the buyer so decides. A Practical Guide for Managers.

This article needs additional citations for verification. When a call option is in-the-money i. Upper Saddle River, New Jersey

The buyer pays a fee called a premium for this right. A Practical Guide for Managers. Moreover, the dependence of the option value to price, volatility and time is not linear — which makes the analysis even more complex. When a call options premium explained is in-the-money i. Energy derivative Freight derivative Inflation derivative Property derivative Weather derivative.

Adjustment to Call Option: Retrieved from " https: For call options in general, see Option law.

Upper Saddle River, New Options premium explained This article is about financial options. Unsourced material may be challenged and removed. October Learn how and when to remove this template message. By using this site, you agree to the Terms of Use and Privacy Policy.

By using this site, you agree to the Terms of Use and Privacy Policy. The most common method used is the Black—Scholes formula. Options premium explained to Call Option: The seller or "writer" is obligated to sell the commodity or financial instrument to the buyer if the buyer so decides.

Trading options involves a constant monitoring of the option value, which is affected by the following factors:. Articles needing additional references from October All articles needing additional references. This page was last edited options premium explained 30 Marchat October Learn how and when to remove this template message.