This paper develops an integrated framework reconciling rational-expectations and behavioral finance by quantifying greed and fear in option markets. Using Cumulative Prospect Theory, we estimate probability-weighting functions for short-and long-dated options, capturing distortions between market-implied and spot-market beliefs. We document significant overweighting of downside risk at short horizons and underweighting of upside potential at long horizons, driving anomalies in the term structure and implied volatility skew. These insights provide a unified explanation for the equity premium puzzle by embedding behavioral distortions within a no-arbitrage asset-pricing model. We show that behavioral features can be systematically quantified to explain market dislocations in implied premiums. (JEL Codes G12, G13, G17 G41.)