Equity Options Valuation

Equity Options Valuation

In this video Imran discusses about the main factors that determine the value of an equity option. He also addresses the Greeks which help us to define key sensitivities to the various factors. Finally, he will show how the value of an option can be broken down into its INTRINSIC and TIME value components.
Overview

Trading in options means trading an asset that does not change in value in a linear fashion with respect to the stock price. Depending on the maturity and strike of the option, its price will behave like a curve with varying sensitivity to spot and this curve will also change shape through the passage of time.

Key learning objectives:

  • Identify the factors determining an options equity value

  • What are the different Greek Letters to signify an options sensitivity?

  • What is the Forward Price and how is it calculated?

  • What are the two components of option value?

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Summary
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Expert
Imran Lakha

Imran Lakha

Imran has been an equity derivatives trader for over 20 years and has run European equity index options trading desks for Merrill Lynch and Citibank. He also spent time as a macro portfolio manager at Bluecrest Capital. Currently, Imran runs his own training company specialising in teaching people how to trade options. This is: Options Insight - Traders That Teach, www.options-insight.com

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