Options Pricing Models

Options are affected by many different market forces. Most options traders have, at one time or another, found themselves asking, Among all the different trading months, strike prices, and trading strategies, how do I identify an option position that represents a profit opportunity? Option pricing models enable you to identify potentially profitable options positions.

Aspen Graphics currently uses the Black/Scholes options pricing model. The value of an option is determined by the following variables:

images/bopt200090000.gif Strike Price

images/bopt200090000.gif Time to Expiration

images/bopt200090000.gif Underlying Price

images/bopt200090000.gif Interest Rates

images/bopt200090000.gif Volatility


The Black Scholes Options Pricing Model