All termsOption Pricing and ValueStart here
Option Pricing Factors
Option pricing factors are the main variables that influence the theoretical and market value of an option. The major factors include: Underlying price Strike price Time to expiration Implied volatility Interest rates Dividends, where applicable
Why it matters to you
A trader can correctly predict the direction of the underlying and still misunderstand what will happen to the option if they ignore the other pricing factors.
Terms that sit next to this one
Interest Rate, Greeks