Step-by-Step Divergence Trading Strategy

Option Pricing Factors

Option prices are influenced by several key factors:

Spot Price: Current market price of the asset.

Strike Price: Pre-agreed exercise price.

Time to Expiry: Longer duration = higher premium (due to time value).

Volatility: Higher volatility = higher premium (greater uncertainty).

Interest Rates: Affect cost of carry.

Dividends: Expected payouts can impact call and put prices.