In options pricing, an exercise price rises from lower to higher which leads to
A
volatile options
B
option value increases
C
option value decreases
D
option value stable
Correct Answer: option value decreases
In options pricing, an exercise price rises from lower to higher which leads to option value decreases. Before venturing into the world of trading options, investors should have a good understanding of the factors determining the value of an option. These include the current stock price, the intrinsic value, time to expiration or the time value, volatility, interest rates, and cash dividends paid.