OPTION and rate

Option Pricing and Interest Rate

Explanation:
It is possible to translate the change in option prices, based on the parent asset price, into interest rate behavior in the general financial market. Options can be viewed as a breakdown of the futures price. Futures prices are part of a system where investors bear risk, using the asset as collateral. For financial institutions, evaluating collateral value is essential to reduce risk, and this is closely related to interest rate evaluation.

B (Base price): S (Current price): T (Time): Tx (Time to maturity):

r (interest rate): －