Recently it seems that option prices have been out of line (with intrinsic value, underling security, etc.). Why?
The price of an option is really a function of “the market” – buyers and sellers. In other words, when more people want to own an option, there may be a rise in the price as the forces of supply and demand become more pronounced. In times of large market movement the secondary markets may experience some increased volatility. For further information on the various components of an options theoretical price, please visit our Options Pricing educational area.
