option pricing
[/ˈɒpʃən ˈpraɪsɪŋ/]
noun
precificação de opções
1. The process of determining the fair value or market price of financial options using mathematical models and financial theory
Option pricing is essential for traders to determine whether an option is overvalued or undervalued in the market.
A precificação de opções é essencial para que os traders determinem se uma opção está sobrevalorizada ou subvalorizada no mercado.
2. The application of quantitative models to calculate the theoretical value of derivative contracts before they are traded
The Black-Scholes model revolutionized option pricing in the financial industry.
O modelo de Black-Scholes revolucionou a precificação de opções no setor financeiro.
3. The discipline combining mathematics, probability theory, and finance to value options based on underlying asset characteristics and market conditions
Advanced option pricing requires understanding volatility, time decay, and interest rates.
A precificação avançada de opções requer compreensão de volatilidade, decaimento temporal e taxas de juros.
Option pricing is a cornerstone concept in global financial markets, particularly in the US and Brazil. In the USA, it reflects the sophisticated derivatives market and quantitative finance culture. In Brazil, despite having a smaller derivatives market, option pricing has gained prominence with the growth of the B3 (formerly Bovespa) exchange. The terminology is standardized across both countries due to the international nature of financial markets and English-language financial education.
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