Black-Scholes Option Pricing Formula
Learn
the basics of the Black-Scholes pricing formula below. This is a prime
example of academic research having a huge impact in financial markets.
With the advent of the Black & Scholes derivative pricing formula,
derivative trading instruments and volume exploded to levels no one would
have ever imagined. If there is one financial math formula you should
attempt to understand, this is the one!
(Roll over and click the above variables for definitions.)
Something a little
more basic? Okay, but don't be intimidated by what's above, this was a major development in finance worth
understanding. So look and learn at some of the basic mechanics of Stock Options and the power (leverage)
they yield for you the investor.
