Index Options (Part II)
Index options premium all depends on the volatility of the market. The duller the market, the lower the index options premium. Well it depends on the expectations of the traders whether the market will move sufficiently in the near future for them to exercise their buy or sell rights. The more volatile the market, the higher then index option premium! Infact there are many factors that can affect the options premium like theta Vega, gamma. Now what are these terms and from where they have cropped up? These terms are known as the options Greeks. Before you start trading options, you need to learn what these terms means.