An option price is the value of an option contract. The option price is determined by the extrinsic and intrinsic value of the option contract. Options are contracts that allow investors to buy or ...

Learn about the financial implications when an option reaches its strike price, and the concepts of moneyness, intrinsic value, and why "at the money" matters for investors.

Option pricing is calculated using the Black-Scholes model, which takes four influential factors into account: the price of an underlying stock (assuming constant drift and volatility), an option’s ...