I notice some OTM call options are very expensive compared to others. Yes, OTM.
I am confused why some OTM call options are very expensive compared to others? Is this based solely on historical volatility or how close Delta is close to the value of 1.00?
I googled it but I can't find how OTM options are priced and I am confused on what determines the value of a "essentially" worthless option. Is there anyone that can explain this to me or share a link that explains it? Is there anything that can help determine a "value" OTM call option?
Thanks.
I am confused why some OTM call options are very expensive compared to others? Is this based solely on historical volatility or how close Delta is close to the value of 1.00?
I googled it but I can't find how OTM options are priced and I am confused on what determines the value of a "essentially" worthless option. Is there anyone that can explain this to me or share a link that explains it? Is there anything that can help determine a "value" OTM call option?
Thanks.
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