An Intuitive Understanding of the Black-Scholes Formulas
4 Pages Posted: 25 Sep 2010
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: 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
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