The Bjerksund-Stensland model is a key method for pricing American options. It helps investors determine optimal times for exercising options with dividends considered.

The valuation of financial derivatives continues to evolve, with option pricing models remaining a cornerstone of modern quantitative finance. Traditional frameworks, such as the Black–Scholes model, ...

Option pricing and risk management constitute fundamental areas in modern financial theory and practice. Their interdisciplinary nature bridges advanced mathematical modelling, statistical analysis, ...

Learn About an Important Method for Valuing Derivatives and Other Assets Gordon Scott has been an active investor and technical analyst or 20+ years. He is a Chartered Market Technician (CMT). Timothy ...

Implied volatility is a powerful but often misunderstood metric that plays a major role in options trading. Implied volatility doesn’t tell you what’s going to happen to an option’s price, but it ...

Options derive their value from an underlying asset, typically a stock, and their price, known as the premium, is influenced by factors ranging from the present share price to the time left until ...

Option pricing is calculated using the Black-Scholes model, which takes four influential factors into account: the price of an underlying stock (assuming constant drift and volatility), an option’s ...

The left side represents the theoretical framework; the top middle contains a labeled box with a circumscribed circle displaying the call and put option prices (c, p), as well as the delta and vega ...

The option Greeks are key metrics that you need to know if you’re trading options. The Greeks help traders understand how options prices will move in response to changes in major factors such as the ...