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Black scholes option model

• Is the seminal work about options pricing models. It was developed by Fisher Black and Myron Scholes. It initially focused on securities prices. Subsequently, it was refined by Fisher Black for the futures markets. Most options models depart from this seed. This important work was published by Fischer Black and Myron Scholes in the May-June 1973 edition of The Journal of Political Economy. It laid the foundation for the quantitative analysis and practical calculation of puts and calls. The model indicated that options would eliminate risk from stock portfolios subject to some assumptions. The lognormal model stated that option values could be determined by using the current stock price, time left to expiration, the strike or exercise price, the variance of the stock's rate of return (standard deviation applied) and the risk-free rate of interest.

 
 

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 Embedded terms in definition
 Exercise price
Exercise
Expiration
Futures market
Futures
Interest
Options
Option
Prices
Quantitative analysis
Rate of interest
Rate of return
Return
Risk
Securities
Seed
Standard deviation
Stock
Subject
Time
Variance
 
 Related Terms
 
Abandonment option
American option
American style option
Annuity form or option
Arbitrage free option pricing models
Asian option
Asset pricing model
Bargain purchase price option
Baumol model
Binary option
Binomial option pricing model
Black box
Black market
Black option model
Black scholes option pricing model
Business model eps projection
Butterfly option spread
Call an option
Call option
Capital asset pricing model
Compound option
Constant growth dividend valuation gordon model
Constant growth model
Covered or hedge option strategies
Currency option
Delta hedge of an option
Delta of an option
Discounted dividend model
Dividend discount model
Dividend growth model
Dividend valuation model
Doubling option
Down and in option
Down and out option
Elasticity of an option
Embedded option
European option
European style option
Exercise or option price
Exercising the option
Explicit option
Factor model
Foreign currency option
Futures option
Gamma of an option
Garmen kohlhagen option pricing model
Gordon model
Greenshoe option
Ho lee option model
Implicit option
In the money option
Index and option market
Index model
Index option
Intrinsic value of an option
Irrational call option
Liquid yield option note
Lookback option
Market model
Miller orr model
Multi option financing facility
Naked option
Naked option position
Naked option strategies
Option
Option adjusted duration
Option adjusted spread
Option adjusted spread model
Option elasticity
Option models
Option not to deliver
Option premium
Option price
Option seller
Option trading strategies
Option type
Option writer
Out of the money option
Path dependent option
Pie model of capital structure
Postponement option
Prepayment option
Put an option
Put option
Quality option
Rho of an option
Seller's option
Short option minimum charge
Simple linear trend model
Single factor model
Single index model
Split fee option
Stock index option
Stock option
Swap option
Tax deferral option
Tax timing option
Time value of an option
Timing option
Two factor model
Two state option pricing model
Value at risk model
Variable growth model
Virtual currency option
Wild card option
Yield curve option pricing models
Yield to call, option or event date
Zero growth model

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