In this video, Dan Pasarelli demystifies how option prices are determined, diving deep into the mechanics that drive the bids and asks you see in the market.
With a focus on market makers, pricing models like Black-Scholes, and the role of implied volatility, Dan explains the processes behind the scenes that set the stage for trading.
Whether you're new to options or a seasoned trader, this clear breakdown of pricing dynamics will sharpen your understanding and trading strategy.
Watch now to trade smarter!
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Options involve risk and are not suitable for all investors. Before trading options, please read Characteristics and Risks of Standardized Option (ODD) which can be obtained from your broker; by emailing investorservices@theocc.com; or from The Options Clearing Corporation, 125 S. Franklin St., Suite 1200, Chicago, IL 60606. The content posted by our authors is intended to be general education and / or general information in nature. We are NOT providing advice for any individual trader. No statement made by our authors or subscribers is intended to be a recommendation or solicitation to buy or sell any security or to provide trading or investment advice. Traders and investors considering options should consult a professional tax advisor as to how taxes may affect the outcome of contemplated options transactions. Futures and forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing one's financial security or lifestyle. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.
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