Simplified Options Selection Method

Journal of Accounting and Finance vol. 13(2) 2013

5 Pages Posted: 19 Dec 2016 Last revised: 24 Nov 2017

Date Written: June 1, 2013

Abstract

Options traders and investors utilize methods to price and select call and put options. The models and tools range from Black-Scholes, binomial & trinomial models, Adaptive Mesh model, and the “Greeks” also known as Delta, Gamma, Vega, Theta and Rho. These methods all provide measurements of risk, time and price sensitivities. Missing from practitioner and academic literature is premium cost versus time. This paper explores a simple method of choosing a call or put option based upon its cost per unit of time to assist in selecting options with similar strike prices and different time intervals of an options chain.

Suggested Citation

VanderPal, Geoffrey, Simplified Options Selection Method (June 1, 2013). Journal of Accounting and Finance vol. 13(2) 2013 . Available at SSRN: https://ssrn.com/abstract=2886938

Geoffrey VanderPal (Contact Author)

Purdue University Global ( email )

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