How to Use the Black-Scholes Calculator

The Black-Scholes model is a mathematical framework for pricing European-style options. Our calculator implements the complete Black-Scholes formula along with the Greeks to help traders and investors analyze option positions.

Understanding the Greeks

Delta: Price sensitivity to underlying stock price changes
Gamma: Rate of change of delta
Theta: Time decay - how much value the option loses per day
Vega: Sensitivity to volatility changes
Rho: Sensitivity to interest rate changes

Model Assumptions

The Black-Scholes model assumes constant volatility, constant risk-free rate, no dividends, and European-style exercise. While these assumptions may not hold in practice, the model provides a theoretical framework for option valuation.