• Venkatesha
• Dr. Jyothilinga V

Derivative is a contract or financial instrument whose value is derived from an underlying asset. Options are highly leveraged financial instruments that allow speculators to participate in the stock market without owning stock and allow shareholders to hedge against unwanted risk. Options can be bought or sold. The maximum loss associated to holder of an option is initial investment with unlimited profit. On the other hand the writer of an option can expose unlimited losses with limited profit. Option prices are set so that in-the-money contracts are more valuable than out-of-the-money contracts, and the far series are more valuable than the near series. The current stock price, exercise price, expiration date, volatility of stock price, risk free interest rate and dividend are factors that also must be considered in determining the price of an option. The present study attempts to know the option price concept and models of option premium.

Option Premium, Block-Scholes Model, Binomial Option Pricing Model

"Option Premium and Option Pricing Models – An Overview", International Journal of Emerging Technologies and Innovative Research (www.jetir.org), ISSN:2349-5162, Vol.9, Issue 1, page no.f90-f98, January-2022, Available :http://www.jetir.org/papers/JETIR2201516.pdf

"Option Premium and Option Pricing Models – An Overview", International Journal of Emerging Technologies and Innovative Research (www.jetir.org | UGC and issn Approved), ISSN:2349-5162, Vol.9, Issue 1, page no. ppf90-f98, January-2022, Available at : http://www.jetir.org/papers/JETIR2201516.pdf