Black-Scholes Option Evaluation Model

This presentation is about the use of Black-Sholes model(1973) for pricing an option. This option pricing model is a formula that is used to determine a fair price for a call or put option based on factors such as :

• The current underlying stock price (S)
• The strike price of the option (X)
• The time left until the option's expiration date (T)
• The volatility of the stock (sigma)
• The risk-free interest rate (rf)

The Application can be accessed using an internet connection. Here is the application link: https://arouna.shinyapps.io/shinyAppProject/

A new browser window will open to show the controls and the visualizations in different tabs.

In the left panel, the user enter values for the five (5) parameters:

• current stock price,
• current strike price
• Time until option exercise
• Volatility
• Risk-free interest rates

After clicking on Evaluate button, the correspoding value of the Call option and the Put option is displayed in the main panel