Black-Scholes Calculator
Call Option Price
Calculate theoretical call option price
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Put Option Price
Calculate theoretical put option price
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Formula
C = S*N(d1) - K*e^(-rT)*N(d2) | P = K*e^(-rT)*N(-d2) - S*N(-d1) | d1 = [ln(S/K) + (r + sigma^2/2)*T] / (sigma*sqrt(T)) | d2 = d1 - sigma*sqrt(T)
Frequently Asked Questions
What is the Black-Scholes model?
The Black-Scholes model is a mathematical model for pricing European-style options. It calculates the theoretical price of call and put options based on stock price, strike price, time to expiration, risk-free rate, and volatility.
What is implied volatility?
Implied volatility is the market's forecast of a likely movement in a security's price. It is derived by solving the Black-Scholes formula backwards from the market price of an option.
Does the Black-Scholes model work for American options?
The standard Black-Scholes model is designed for European options (exercisable only at expiration). American options (exercisable any time) may require adjustments, especially for dividend-paying stocks.
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