Chapter 03 · Section 3.1

The Black & Scholes model

The Black & Scholes model was published in 1973 by Fisher Black and Myron Scholes. It is another of the most frequently used options pricing models.

It is noted for its relative simplicity and its fast mode of calculation: unlike the binomial model, it does not rely on calculation by iteration.

The intention of this section is to introduce you to the basic premises upon which this pricing model rests. A complete coverage of this topic is material for an advanced course.