Appropriate value or price of an option


Using the Websitehttps://www.option-price.com/index.php, determine the appropriate value or price of an option under the following conditions (use "3" the "rounding" parameter"):

Exercise price $90

Underlying stock price $90

Time between option expiration and today 30 days

Standard deviation of stocks returns 10%

Marketplace interest rates or avg. rate of return 8%

Dividend yield 5%

How would the price of this option change if the expiration date were 85 days from now, vs. 30 days?

Why does this difference (between 1 and 2) make sense?

Make up an example of a company in an industry and the conditions in the marketplace which might cause you to buy a "put option" for company A, in industry B stock...vs. a "call option" on some other company X in industry Y.

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Finance Basics: Appropriate value or price of an option
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