Options Trading: Intrinsic Value and Time Value

Making smart trades requires some basic understanding of how options are priced and the factors that influence the price.  Now I am not talking about learning how to perform the necessary calculus and determining the price of options based upon the Nobel Prize winning Black-Scholes formula.  I am talking about understanding the basic relative relationships that form the components of the formula and being able to know what will happen to the price of an option as a variable changes.

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