Black Scholes Equation

[erol]

Quote from jnbadger:

Absolutely not.

I would highly recommend getting a free trial of Think or Swim and playing with their analytics. (I think you can still do this) They have a couple different models you can use for pricing.

You will find that regardless of the model you use, one quick pop or decline in Implied Volatility will effect your position a lot faster than using the wrong model.

Eventually learn ALL of the greeks and what they will do to/for a position. There's no reason to pump them into a formula every time you want to trade.

I'm gonna say +1 on thinkorswim

plugging values into a formula is one thing

charting and playing with the sensitivities is another.

 

[dsss27]

Quote from lasner:
So does anyone know where I can find the software to use black scholes?

www.samoasky.com

 

[jnbadger]

Quote from lasner:

Thanks for the link is there a link on there for black scholes calculation

Based on this, it's safe to say the thread is a joke, or the OP can't tie his own shoes and could never trade options anyway.

 

[Carl K]

Lasner, sure there is
From "HOME" select "FEATURES"
From "FEATURES" select "BLACK-SCHOLES TO THE PEOPLE"
www.espenhaug.com/black_scholes.html

Also 3D graphics including Black-Scholes
From "FEATURES" Select "VIRTUAL REALITY OPTION WORLD"
www.espenhaug.com/virtual_world/VirtualOptionWorld.html

There are not many sites like this one.

Carl

 

[Carl K]

Quote from lasner:

Thanks for the link is there a link on there for black scholes calculation

Sorry I missed this on the last post.
http://xfraniatte.free.fr/BSphp.php3

Espen Haug also includes code for programing in Excel and says,
" What about taking Black-Scholes in your head instead?
If the option is about at-the-money-forward and it is a short time
to maturity then you can use the following approximation:"
call = put = StockPrice * 0.4 * volatility * Sqrt( Time )

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1012075

Carl

 

[optionable]

In my experience, I have had little luck or understanding the practical application of the Black Scholes Equation.

Personally I have learnt a lot more from traders who work with options on a daily bases as opposed to the more theory, academia based crowd.

Hope this helps.

(P.S. There is a lot of good advice on these boards btw.)

 

[lasner]

Quote from Carl K:

Sorry I missed this on the last post.
http://xfraniatte.free.fr/BSphp.php3

Espen Haug also includes code for programing in Excel and says,
" What about taking Black-Scholes in your head instead?
If the option is about at-the-money-forward and it is a short time
to maturity then you can use the following approximation:"
call = put = StockPrice * 0.4 * volatility * Sqrt( Time )

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1012075

Carl

Carl...Thanks Man...I appreciate it