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?