In options trading, the extrinsic value of an option represents the portion of the option's price that's based on factors other than the immediate value of exercising it. Also known as “time value,” ...

An option price is the value of an option contract. The option price is determined by the extrinsic and intrinsic value of the option contract. Options are contracts that allow investors to buy or ...

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 ...