The purpose of Example 16.2 was to show you that the Black-Scholes formula is not hard to use—even if at first it looks imposing. If you are in a hurry to price an option or if you want to verify the price of an option that you have calculated, a number of option calculators are available on the web. Let’s check our previous answers by using the option calculator we found at option-price.com.

Example 16.2

Calculate call and put option prices, given the following inputs to the Black-Scholes option pricing formula:

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Stock price Strike price Time to maturity Stock volatility Interest rate S = $50 $45 K T = 3 months O 25% 6% r =