Black-Scholes Option Pricing Model

Definition

A model used to calculate the value of an option, by considering the stock price, strike price and expiration date, risk-free return, and the standard deviation of the stock's return.

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You may want to try and figure out a way to make the black-scholes option pricing model work in your favor.

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We were conducting the meeting and going over the value of the options and we used the Black-Scholes Option Pricing Model to understand our portfolio of options.

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My hedge fund manager scoffs at the Black-Scholes option pricing model and has made a large sum of money trading against it knowing that it is used by so many other investors.

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