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Black-Scholes

Dutch translation: Black-Scholes formula

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GLOSSARY ENTRY (DERIVED FROM QUESTION BELOW)
English term or phrase:Black-Scholes formula
Dutch translation:Black-Scholes formula
Entered by: Meturgan
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15:14 Nov 21, 2000
English to Dutch translations [PRO]
Bus/Financial
English term or phrase: Black-Scholes
Subject: Gas storage
Dear colleagues,
Please help me first of all to understand what is meant here.
Thanks in advance.
With kind regards,
Daniel Meturgan

Mathematicians highly sought to apply Black-Scholes to value storage. Volatility measurement is the key.
Meturgan
Hungary
Local time: 14:19
Black-Scholes formula
Explanation:
From the Chicago Board Options Exchange:

"Black-Scholes formula: The first widely-used model for option pricing. This formula can be used to calculate a theoretical value for an option using current stock prices, expected dividends, the option's strike price, expected interest rates, time to expiration and expected stock volatility. While the Black-Scholes model does not perfectly describe real-world options markets, it is still often used in the valuation and trading of options."

The formula calculates options prices given several known factors and one unknown factor which is future stock volatility. Conversely, it can be used to calculate implied volatility from historical option prices.
I guess mathematicians were trying to apply this formula to the valuation of gas in storage.

Marc
Selected response from:

Portfire
Grading comment
Both answers were very good. Thank you for your help.
With kind regards,
Daniel Meturgan
4 KudoZ points were awarded for this answer

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Summary of answers provided
naBlack-Scholes formule
Carla Zwanenberg
naBlack-Scholes formulaPortfire


  

Answers


25 mins
Black-Scholes formula


Explanation:
From the Chicago Board Options Exchange:

"Black-Scholes formula: The first widely-used model for option pricing. This formula can be used to calculate a theoretical value for an option using current stock prices, expected dividends, the option's strike price, expected interest rates, time to expiration and expected stock volatility. While the Black-Scholes model does not perfectly describe real-world options markets, it is still often used in the valuation and trading of options."

The formula calculates options prices given several known factors and one unknown factor which is future stock volatility. Conversely, it can be used to calculate implied volatility from historical option prices.
I guess mathematicians were trying to apply this formula to the valuation of gas in storage.

Marc


    Reference: http://www.cboe.com/
Portfire
PRO pts in pair: 4
Grading comment
Both answers were very good. Thank you for your help.
With kind regards,
Daniel Meturgan
Login to enter a peer comment (or grade)

8 hrs
Black-Scholes formule


Explanation:
It's a mathematical formula developed by Fischer Black and Myron Schole with which investors can reduce their risk on the stock market. You can find articles about the work of Black and Scholes for instance at Britannica.com.
At http://ggw.org/donorware/options/ the formula is explained.


    Reference: http://ggw.org/donorware/options/
    Reference: http://www.britannica.com/bcom/eb/article/3/0,5716,120323+1+...
Carla Zwanenberg
Netherlands
Local time: 14:19
Native speaker of: Native in DutchDutch
PRO pts in pair: 317
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