It is important to differentiate between an option premium and its theoretical value. As discussed previously, the option premium is the price the option buyer pays to the seller in order to have the right granted by the option, and it is the money the seller receives in exchange for writing the option.
The theoretical value of an option, on the other hand, is the estimated value of an option – a price generated by means of a model. It is what an option should currently be worth using all the known inputs, such as the underlying price, strike and days until expiration. These factors often change during an option's lifetime, and some fluctuate in value on a continuing basis throughout any trading session.
A pricing model will create theoretical values, but they are just that – theoretical. Specific values for each factor can be used to predict an option contract's theoretical value at a given point in the future.
When options are first listed on a stock, for example, the market makers will not know what sort of implied volatility to use, so they must make educated guesses (theoretical values). The implied volatility will then change based upon the supply and demand for the options.

Trading
Getting Acquainted With Options Trading
Learn more about stock options, including some basic terminology and the source of profits. 
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Understanding Option Pricing
Take advantage of stock movements by getting to know these derivatives. 
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The Ins And Outs Of Selling Options
Selling options can seem intimidating but with these tips, you can enter the market with confidence. 
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What Is Option Moneyness?
Get the basics under your cap before you get into the game. 
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What is Meant by Implied Volatility?
The estimated volatility of a security's price. 
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Options Hazards That Can Bruise Your Portfolio
Learn the top three risks and how they can affect you on either side of an options trade. 
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What Drives An Option's Price?
The primary drivers of an option’s price are the underlying stock’s current price, the option’s intrinsic value, its time to expiration and volatility.