All termsOption Pricing and ValueStart here
Option Pricing
Option pricing is the process of determining the value of an option based on factors including the underlying asset price, strike price, time remaining until expiration, expected volatility, interest rates and, where relevant, dividends.
Why it matters to you
An option's value does not depend on direction alone. Two call options on the same stock can have very different prices because they have different strikes, expirations or implied volatility. Understanding these inputs helps explain why an option moved the way it did.