Hello,
As we know IV play significant role in option, as i can see difference in IV on upstox platform as compare to option chain.
any reason for this?
@firoz_quraishi - I posted on the reason behind the difference in IV values here.
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@mike upstox also consider future value for the calculation of intrinsic value and time value?
Discounting / Time Value of Money / Interest Rates (as a variable in the BSM) are related to the strike price. For instance, you could by the stock right now or you could buy it at the strike price in the future. The BSM incorporates the time value difference of buying now vs. in the future. The impact of the change in interest rate on the option price is rho as discussed on the other thread.
Intrinsic Value and Extrinsic Value are simply a breakdown of the optionās price (that would already account for time value of money). All they tell you is how much is a potential settlement value (if the contract were to expire right now) and how much is a āspeculationā premium.
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