In this module, and upcoming later in the semester, we will spend a good deal of time discussing the concept of option pricing, both in terms of the theoretical approach and methodologies that we utilize. In this forum, you will find current financial news on options pricing. Then, provide insight into the challenges that we face regarding the pricing of options, focusing on the following:
What are the major variables that drive the price of options?
How effectively can we measure/capture the value of these variables?
Is there a clear, correct approach to pricing options?
What are the major shortfalls with the methodologies that we have reviewed?
Explain why and how you see things differently.
Discuss any issues happening across the U.S. or the globe that are negatively or positively affecting options pricing.
