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Calculating the Value of Stock Options
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Black-Scholes Model based option price calculator:
Current share price [£] 70.02
Exercise (strike) price [£]
Maturity (expiration) date / / dd/mm/yyyy
Number of options
Volatility 0.8533 %
Option value (call): £ 0.33   Register to access full version of calculator and VOLATILITY ANALYSIS
Option value (put): out-of-the-money  
Assumptions of the Black and Scholes Model:
  1. The stock pays no dividends during the option's life
    A common way of adjusting the model for this situation is to subtract the discounted value of a future dividend from the stock price.

  2. European exercise terms are used
    European exercise terms dictate that the option can only be exercised on the expiration date.

  3. Markets are efficient
    Trading in the stock is continuous.

  4. No commissions are charged
    There are no transaction costs or taxes.

  5. Interest rates remain constant and known
    The Black and Scholes model uses the risk-free rate to represent this constant and known rate. In reality there is no such thing as the risk-free rate.

  6. Returns are lognormally distributed
    This assumption suggests, returns on the stock priceing stock are normally distributed.