Last Updated: July 12, 2025
© 2025 The Richo Edge. All rights reserved. Content copyright timestamped 2025.
Overview
This module delivers risk-aware modeling of options fair value by considering underlying asset price, implied volatility, time decay, and interest rates. It aims to identify mispricings and optimize strategy selection.
The RISI Framework Breakdown for Options Pricing and Fair Value Modeling
| Step | Name | Purpose |
|---|---|---|
| R | Role | Sets the AI’s posture and persona as an institutional options valuation analyst. |
| I | Insight | Analyzes key pricing factors including volatility, time decay, and interest rates. |
| S | Strategy | Simulates valuation adjustments and trading strategies based on fair value models. |
| I | Impact | Provides actionable guidance on exploiting pricing inefficiencies and managing risk. |
How to Use the Options Pricing and Fair Value Modeling Module
Copy and paste these prompts into ChatGPT sequentially, replacing [STOCK] with your target stock:
- Role Prompt:
Activate ProOptions Mode for Institutional Options Valuation - Pricing Factors Prompt:
Summarize key options pricing factors — implied volatility, time decay, interest rates — for [STOCK]. Limit output to one paragraph. - Fair Value Analysis Prompt:
Analyze options fair value and potential mispricings for [STOCK]. Limit output to one paragraph. - Strategy (Simulation) Prompt:
Simulate institutional trading strategies based on fair value modeling for [STOCK]. Limit output to one paragraph. - Impact (Implications) Prompt:
Summarize actionable trading implications from options pricing and fair value analysis. Provide one clear, actionable paragraph grounded in institutional behavior.
Copyright Notice:
The prompts, frameworks, and related content on this page are the exclusive intellectual property of The Richo Edge and are protected by copyright law. Unauthorized copying, reproduction, or redistribution is prohibited. Use of this content is permitted for personal, non-commercial purposes without prior authorization. Commercial use requires explicit permission. We encourage you to write about or reference our frameworks in blogs or articles, with clear credit to The Richo Edge. For permission requests, please contact us via the website contact form. Please review our Terms of Use for detailed copyright and usage policies.
RISI Fingerprint Protection:
All RISI prompts and frameworks are secured and authenticated through our proprietary RISI Fingerprint technology.