Theoretical price of an option

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Querist : Anonymous

Querist : Anonymous (Querist)

07 February 2017 is theoretical price of an option same as its intrinsic value

Expert : Anonymous

Expert : Anonymous (Expert)

08 February 2017 not necessary. theoretical price is driven from various models whereas Intrinsic value in case of call or put is difference between spot price and strike price. and for futures it is present value of exercise value discounted at prevailing market risk free rate. Refer ICAI Studymate of SFM