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Explain the Black-Scholes Model’s Purpose

A mathematical model used to calculate the theoretical fair price of European options.
Greeks.Live30.10.25

Explain the Black-Scholes Model’s Purpose.

The Black-Scholes model is a mathematical model used to estimate the theoretical fair price of European-style options. It considers factors like the underlying asset's price, strike price, time to expiration, volatility, and the risk-free interest rate.

How Does the Black-Scholes Model Use Implied Volatility to Calculate Option Price?
How Does the “Black-Scholes-Merton” Model Relate to the Concept of an Option’s Fair Value?
What Is the Black-Scholes Model Primarily Used for in Options Trading?
What Is the Difference between American and European Options, and Why Does the Black-Scholes Model Only Apply to European Options?

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