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What is theoretical value of an option?

option theoretical value
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What is theoretical value of an option?

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When you want to buy an option you probably want to know what is the fair value of the option and what should be the fair price of an option, whether the option is under-valued, over valued or rightly valued. You can get answers to these questions by calculating the theoretical value of an option. There are many mathematical models and formulas available which can be used.

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