Dear Traderji,
As per my little knowledge,
option premium=intrinsic value + extrinsic value.
extrinsic value depends on
1)days remain for expiry--as days reduces,extrinsic value reduces.
2)implied volatility
3)open interest
Q.
what are the relations between A)extrinsic value and implied volatality
B)extrinsic value and open interest.
C) and other factors on which extrinsic value depends?
please post your valuable comments.
As per my little knowledge,
option premium=intrinsic value + extrinsic value.
extrinsic value depends on
1)days remain for expiry--as days reduces,extrinsic value reduces.
2)implied volatility
3)open interest
Q.
what are the relations between A)extrinsic value and implied volatality
B)extrinsic value and open interest.
C) and other factors on which extrinsic value depends?
please post your valuable comments.