It should be noted that while quantifiable factors can explain much of the observable price behavior, supply and demand still play an important part and can (and do) override predictive option values created by using pricing models. A sustained imbalance of competing bids and offers can drive prices away from theoretically expected values. Imbalances can be caused by factors such as a sudden political event or unexpected news regarding a particular stock. These factors cannot be quantified and can have an effect on both option prices and the accuracy of price modeling. That being said, theoretical options pricing is a valuable tool that helps investors and traders anticipate price movements for option positions.

Please note:
Options involve risks and are not suitable for everyone. Option trading can be speculative in nature and carry substantial risk of loss. Invest only with risk capital or money that you can afford to lose. None of the information in this tutorial should be construed as a recommendation to buy or sell a particular security or to provide investment advice.





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