Trade History History: QQQQ Opt History: SPY Opt Simple to Use Trade Example Signal Example

FAQs General Our Timing Signals Email Alerts Alert Example Suggested Entry Price Suggested Exit Price Expired Signal Alternative Trades Our Timing Strategy All About Our Signals   FREE Options Newsletters How much is two plus six? Submit Email:

Options Definition: Fair Value

An option's fair value is simply its value at the current moment. The fair value will therefore fluctuate with market conditions.

It is important to know the parameters that affect the price of an option:

• Valuation Date: This is the date for which you are determining an option's fair value (i.e., the current date.)
   
• Expiration Date: The date on which an option expires. After this date, it cannot be exercised and is therefore worthless..
   
• Price: The price of an underlying security ďż˝ provides the basis for pricing the option at the time of its valuation.
   
• Strike Price: This is the price at which the option may be exercised.
   
• Volatility: The volatility of an asset provides a measure of the random variability or dispersion of price data per unit of time, usually quoted as the annual standard deviation of an asset's price.
   
• Type of option: Call or put.
   
• Option Style: There are American style and European style options. American style options can be exercised at any time up to the expiration date. European style options may be exercised only on the expiration date itself.

For Instant Access,
Sign up Now!

Just one winning trade
could pay for your membership for years to come!