What is an Option’s Theoretical Value? | Understanding Models & Significance

What is an Option’s Theoretical Value? | Understanding Models & Significance Want to know if options are overpriced or underpriced? This webinar breaks down the concept of theoretical value in options trading and how Market Chameleon helps you spot potential mispricings. Learn how to use theoretical value as a benchmark, identify synthetic stock discounts, and understand the impact of cost of carry on option prices. We'll cover: Understanding Theoretical Value: Learn what it is and why it's crucial for benchmarking option prices. Market Chameleon's Approach: Discover how the platform uses a "best fit implied volatility curve" and the binomial model. Identifying Potential Anomalies: Learn how to spot unusual pricing due to factors like hard-to-borrow stocks and dividend expectations. Put-Call Parity and Synthetic Stock Discounts: Understand how deviations from parity can signal hard-to-borrow situations. Cost of Carry Impact: See how factors like interest rates and dividends affect option pricing. Limits to Arbitrage: Learn why apparent mispricings may not always be exploitable. Key Topics Covered: Options Trading, Theoretical Value, Market Chameleon, Options Pricing, Implied Volatility, Put-Call Parity, Synthetic Stock, Cost of Carry, Arbitrage, Options Analysis, Trading Education, Financial Models. Gain a deeper understanding of option pricing and enhance your trading strategy! https://marketchameleon.com/Overview/SPY/OptionChain/ Financial Disclosure: This video is for informational and educational purposes only and is not investment advice. Market Chameleon, the presenters, and this content are not registered investment advisors or broker-dealers. Please consult a licensed professional before making any investment decisions.