# Stock option pricing model. In finance, a price (premium) is paid or received for purchasing or selling options. This price can be split into two components. These are: Intrinsic value; Time value. Contents. [hide]. 1 Intrinsic value; 2 Time value; 3 Other factors affecting premium; 4 Pricing models; 5 Value adjustments. Intrinsic value. The intrinsic  ?Intrinsic value · ?Time value · ?Other factors affecting.

## Stock option pricing model. Option traders use various options pricing models to calculate theoretical option values. These mathematical models use certain fixed knowns in the present – items such as underlying price, strike price and days until expiration – along with forecasts (or assumptions) for factors such as implied volatility, to compute the.

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