The required input for calculating option premium is future price in few models and spot in certain models. .BS says about spot price only. Can THIS BE DISCUSSED
for stocks , we have to follow future price … it’s a no brainer here
for monthly index options , follow index future …
but for weekly options , take approximate guess between spot and index future
Dear @mxtraj, As, BLACK SCHOLES says about spot price only.
This is applicable for both STOCK & INDEX.
PREMIUM IS BASED ON OPTION GREEK IV, Day’s to EXP, DIVIDEND, Interest Rate,Strike, etc.
SO not on FUTURE.
FUTURE PRICING is totally different.
sir your reply /comment pls
thank u for ur reply.
One of the inputs for computing the theoretical price of an option is current price.
Some use spot price and others use the future price of the corresponding expiry.
many leading apps use future price as input rather than spot inex/scrip
Well in that case INTEREST RATE is 0 ZERO, If you take FUTURE price as theoretical value.
You will get approx same result/ OPTION PREMIUM VALUE.
that was a logical reply
I draw your attention to this from @sensibull
and this (same thread)
and this as well
Hi! spec guy
thanks for the pains taken in explaining