In options trading, assessing intrinsic and extrinsic value can help determine an option's price. Intrinsic value shows the profit from immediate exercise, while extrinsic value accounts for factors ...

Option pricing is driven by various sensitivities. One of these sensitivities is called Gamma. Gamma measures the rate of change in an option’s Delta score based on a one-point move in the underlying ...

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Investopedia contributors come from a range of backgrounds, and over 25 years there have been thousands of expert writers and editors who have contributed. Thomas J Catalano is a CFP and Registered ...

Time decay refers to the rate at which time reduces the value of an option. First, it's essential to understand that time decay is exponential and accelerates as expiration draws closer. The rate of ...

In the world of investing, options trading can often appear as a complex puzzle. One of the puzzle pieces that frequently demands attention is the concept of "intrinsic value" in options. This article ...