Fill This Form To Receive Instant Help

Help in Homework
trustpilot ratings
google ratings


Homework answers / question archive / identify the potential reasons for options miss-pricing

identify the potential reasons for options miss-pricing

Finance

identify the potential reasons for options miss-pricing

pur-new-sol

Purchase A New Answer

Custom new solution created by our subject matter experts

GET A QUOTE

Answer Preview

The reasons for options mis-pricing are :

i) Underlying Price - If the underlying price is mispriced then the option price is mispriced .

ii) Implied Volatility - it is a estimated factor which can be incorrect which will lead to mispricing .

iii)Dividend - Options do not receive , so their value fluctuates when dividends are released .