Black scholes

Black Scholes Model
A model of price variation over time of financial instruments such as stocks that can, among other things, be used to determine the price of a European call option.

Black Scholes model
A formula that examines the price variation of financial instruments over time. It is often used to determine the price levels of European call Options.

Black Scholes Model
An option pricing formula initially developed by F. Black and M. Scholes for securities options and later refined by Black for options on futures.
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Black Scholes - A model used to calculate the value of a European call option that uses stock price, strike price, expiration date, risk-free return, and the volatility of the stock's return.

For bonds here, there are two main approaches: (1) Depending on the type of option, the option price, as calculated using Black Scholes, ...

Black Scholes can be used in reverse to calculate the implied volatility (IV) necessary to generate a given price; graphing the IV for a wide range of exercise prices will result in a plot resembling a smile.

Implied Volatility - a measure of the stock volatility that is implied by the actual trading price of an option. In other words, the Black Scholes model will take the price of an option contract, ...

An option model for valuing American options, an extention of Black Scholes.
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The volatility level that justifies an option's current price. This price is based on an option model such as the popular Black Scholes Model which yields a "theoretical value" for an option.
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Some options traders deal in volatility, buying options when their implied volatility is low and selling options when their implied volatility is high. By using the Black Scholes Model an investor who knows the option price, ...

Option Pricing Model - is a complex asset valuation model which attempts to determine the value of a security by combining but volatility and time. The most common option pricing model is the Black Scholes model.

See also: Black, Market, Model, Option, Stock