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MODULE 05

How Options Are Priced

22 Topics|~6 Hrs Completion Time

How Options Are Priced

Interactive Curriculum Structure • 22 Lessons

The Four Forces That Drive an Options Premium

Intrinsic Value and Time Value — Deep Dive

The Black-Scholes Model — The Concept Without the Formula

The Five Inputs to the Black-Scholes Model

How Volatility Drives Premium — The Core Relationship

How Time to Expiry Drives Premium

How the Underlying Price Affects Premium

Interest Rates and Options Pricing — Rho in Context

Historical Volatility — What the Market Actually Did

Implied Volatility — What the Market Expects

IV vs HV — How to Tell If an Option Is Cheap or Expensive

IV Rank and IV Percentile — Comparing IV to Its Own History

India VIX — The Fear Index of Indian Markets

India VIX Calculation — Conceptual Understanding

India VIX Thresholds — What Above 18 and Below 14 Mean

IV Expansion Before Events — Budget, RBI, Elections, Results

IV Crush After Events — Why Right Direction Still Loses Money

Volatility Smile and Skew in Indian Index Options

Put-Call Parity — The Arbitrage Relationship

Using a BSM Calculator on Sensibull — Practical Application

Identifying Overpriced and Underpriced Options

The 4-Question Pre-Trade Pricing Checklist