Black Scholes Calculator

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Black Scholes Calculator

This Black Scholes calculator uses the Black-Scholes option pricing method to help you calculate the fair value of a call or put option.

Here is a brief preview of CFI’s Black Scholes calculator.


Black Scholes Calculator Preview


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Option Pricing

CFI’s Black Scholes calculator uses the Black-Scholes option pricing method. Other option pricing methods include the binomial option pricing model and the Monte-Carlo simulation.

The Black-Scholes option pricing method focuses purely on European options on stocks. European options, which can only be exercised on the expiry date of the option. American options, which can be exercised early, cannot be priced using the Black-Scholes option pricing method.

Using this method, the Black Scholes calculator makes a few assumptions that you will need to remember:

The main variables calculated and used in the Black Scholes calculator are:

  • Stock Price (S): the price of the underlying asset or stock
  • Strike Price (K): the exercise price of the option
  • Time to Maturity (t): the time in years until the exercise/maturity date of the option
  • Risk-free Rate (r): the risk-free interest rate
  • Volatility (σ): the measure of how much the underlying asset’s prices will move over time. This calculator uses annualized volatility


Additional Resources

Thank you for reading CFI’s guide on Black Scholes Calculator. Check out our business templates library to download numerous free Excel modeling, PowerPoint presentation, and Word document templates.

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Below is a break down of subject weightings in the FMVA® financial analyst program. As you can see there is a heavy focus on financial modeling, finance, Excel, business valuation, budgeting/forecasting, PowerPoint presentations, accounting and business strategy.


Financial Analyst certification curriculum


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Additional Questions & Answers

CFI is the global institution behind the financial modeling and valuation analyst FMVA® Designation. CFI is on a mission to enable anyone to be a great financial analyst and have a great career path. In order to help you advance your career, CFI has compiled many resources to assist you along the path.

In order to become a great financial analyst, here are some more questions and answers for you to discover:


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