Articles tagged with "formulas"

Use Implied Volatility to Discover Stock Price Expectations

In the previous article, What is Implied Volatility in Options?, we introduced implied volatility and how it is calculated. Implied volatility is one of the most important factors used to assess the affordability or the luxury of an option. The judgment of option traders and investors in determining their best buying and selling strategies for […]

What is Implied Volatility in Options?

In our article on the Black-Scholes formula, we explained that before the popularity of the Black-Scholes model, it was difficult for investors to evaluate whether an option was fairly priced. When the formula was developed, people became more confident with the idea that it is indeed possible to enter a perfectly hedged position. This is […]

Black Scholes Formula Explained

Black Scholes Explained: In this article we will explain how Black Scholes is the Theoretical Value of an Option. In financial markets, the Black-Scholes formula was derived from the mathematical Black-Scholes-Merton model. This formula was created by three economists and is widely used by traders and investors globally to calculate the theoretical price of one […]