The Valuation of Up and in Barrier Options on the Tesla Index

This research researched to evaluate the valuation of in and up barrier methods in Tesla's index. This research used the pricing model of barrier methods and, specifically, the Black Scholes model. The model is favorable for some reasons such as being less costly than conventional models that attract investors who presume that there will not be a trigger on their barrier option. This research obtained the valuation of the up-and-in barrier option of Tesla's index and compared it to the standard European options price option. The comparison in the model involved a sensitivity analysis of the independent variables against the dependent variables where barrier, spot price, volatility, and strike price are the independent variables against the dependent variable of the option price. This research then adjusted the independent variables multiple times to observe option price behavior under the same conditions. The results were that the option price fell as barrier and strike price decreased. The spot price also increased with an increase in volatility and spot price . The evaluation is thus essential to forecast Tesla's performance in terms of profitability and growth based on the most appropriate barrier option. Investors will be more informed on the most appropriate barrier option to purchase with the most reasonable chances of return based on the option price and the sensitivity of the independent variables such as volatility and spot price. Tesla’s investors will be in a position to make appropriate investment decisions.