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 ...

Conversion arbitrage is a risk-neutral strategy in options trading that exploits pricing inefficiencies in calls and puts. Learn how it uses put-call parity to uncover profit opportunities.

American options, which allow early exercise at any point prior to expiry, present a unique challenge in quantitative finance. Their valuation gives rise to free-boundary problems that are typically ...

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 ...

Zions Bancorporation developed Employee Stock Option Appreciation Rights Securities (ESOARS) as a market-based pricing technique for expensing stock options under FASB Statement no. 123(R). ESOARS ...

Stochastic volatility models have revolutionised the field of option pricing by allowing the volatility of an asset to vary randomly over time rather than remain constant. These models have ...

Investors with an interest in Retail - Restaurants stocks have likely encountered both Compass Group PLC (CMPGY) and Dutch Bros (BROS). But which of these two stocks offers value investors a better ...