the market is in equilibrium, then an option must sell at a price that is exactly equal to the difference between the stock's current price and the option's strike price.

Question

Quizplus · Accepted Answer

In market equilibrium, an option's price is determined by various factors including the stock's current price, strike price, time to expiration, volatility, and interest rates, not just the difference between the stock's current price and the option's strike price.

The Market Is in Equilibrium, Then an Option Must Sell