The Black Scholes Option Pricing may be used to compute the fair market value of options, its computation requires some level of mathematical analysis. If you own a Tinspire CX you can easily compute the Black Scholes Put and Call pricing – step by step – using the Portfolio Made Easy app at https://www.tinspireapps.com/?a=PIME . Just follow the steps below.
Select 1: Black Scholes : Call & Put Price
Enter the expiration date (in days), the stock price , its volatility (in %) , the strike price and the risk-free rate (in%)
Notice how the value are plugged into the Black Scholes formula. Notice how the 60 days are automatically divided by 365 days to turn the 60 days into a fraction. Additionally, the volatility and the risk-free rate re expressed as decimals.
After computing the parameters d1, d2 and the values of the normal distribution the Call price C is determined, here C = 49.4468
Lastly , the Put Price is computed, here P=37.937
The computation is easily accomplished simply by entering the given values, and it is always correct 😉
This is the app! Unlike any other financial app, the Finance Made Easy app shows you step by step how to work the ways of the finance world. Check out our video of our app below. Want more? Go to www.tinspireapps.com for the free trial version. Help awaits!