An Intuitive Understanding of the Black-Scholes Formulas

4 Pages Posted: 25 Sep 2010

See all articles by Jing Chen

Jing Chen

University of Northern British Columbia - School of Business

Date Written: September 24, 2010

Abstract

Black-Scholes formulas for European call and put options are the core of the option theory. However, Black-Scholes formulas are often considered difficult by many students. In this short note, we present an intuitive understanding of the Black-Scholes formulas. This intuitive understanding makes the option theory more accessible to many people.

Keywords: Intuitive Understanding, The Option Theory, The Black-Scholes Formulas

JEL Classification: A20, G13

Suggested Citation

Chen, Jing, An Intuitive Understanding of the Black-Scholes Formulas (September 24, 2010). Available at SSRN: https://ssrn.com/abstract=1682261 or http://dx.doi.org/10.2139/ssrn.1682261

Jing Chen (Contact Author)

University of Northern British Columbia - School of Business ( email )

Prince George, BC, V2N 4Z9
Canada
250-960-6480 (Phone)
250-960-5544 (Fax)

HOME PAGE: http://web.unbc.ca/~chenj/

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