Black-Scholes-Merton Option Pricing Model for Put Option
The Black-Scholes-Merton model makes several assumptions, including constant volatility, no dividends paid during the option's life, and that the option can only be exercised at expiration (European option). It provides a theoretical framework for pricing options, and the calculated option prices are often used as a benchmark for comparing with market prices. Keep in mind that the model has limitations and may not perfectly reflect real-world market conditions.
The Black-Scholes-Merton model makes several assumptions, including constant volatility, no dividends paid during the option's life, and that the option can only be exercised at expiration (European option). It provides a theoretical framework for pricing options, and the calculated option prices are often used as a benchmark for comparing with market prices. Keep in mind that the model has limitations and may not perfectly reflect real-world market conditions
How to Calculate Black-Scholes-Merton Option Pricing Model for Put Option?
Black-Scholes-Merton Option Pricing Model for Put Option calculator uses Theoretical Price of Put Option = Option Strike Price*exp(-Risk Free Rate*Time to Expiration of Stock)*(-Cumulative Distribution 2)-Current Stock Price*(-Cumulative Distribution 1) to calculate the Theoretical Price of Put Option, The Black-Scholes-Merton Option Pricing Model for Put Option formula is defined as a mathematical model used to calculate the theoretical price of European-style options. Theoretical Price of Put Option is denoted by P symbol.
How to calculate Black-Scholes-Merton Option Pricing Model for Put Option using this online calculator? To use this online calculator for Black-Scholes-Merton Option Pricing Model for Put Option, enter Option Strike Price (K), Risk Free Rate (Rf), Time to Expiration of Stock (ts), Cumulative Distribution 2 (D2), Current Stock Price (Pc) & Cumulative Distribution 1 (D1) and hit the calculate button. Here is how the Black-Scholes-Merton Option Pricing Model for Put Option calculation can be explained with given input values -> 151365.1 = 90*exp(-0.3*2.25)*(-57.5)-440*(-350).