All Questions
Tagged with black-scholes volatility
4 questions
2
votes
3
answers
613
views
why volatility increases price for ITM call options?
Similar questions have been asked here, but I'm not able to find this exact question. For a European call option, if it's very in-the-money, wouldn't a higher volatility decrease the probability it ...
- 89
0
votes
1
answer
372
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In option pricing formulas, is the volatility and short rate a decimal or a percentage?
In the BS option pricing formula, when entering values for volatility and short rate, do we enter them as percentages or decimals?
Take the time unit to be a year, i.e. if we want to price something ...
- 1
5
votes
2
answers
1k
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Implied or historical volatility to calculate theoretical options price with black scholes?
According to the black scholes model, volatility is one of the variables to calculate the fair price of an option. However, it doesn't specify which volatility should I use. Should I take the ...
- 301
2
votes
1
answer
1k
views
Why IV and stock price are inversely related
What is the reason that Implied Volatility and Stock Price are inversely related?
Is it possible to understand this qualitatively without getting into the math of the Black-Scholes formula?
- 16.1k