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The 'Black and Scholes' option valuation model consists of a complex mathematical formula developed by two famous economists in the early 1970's, which allows the 'theoretical' price of an equity option to be calculated.
The Black & Scholes model makes the following assumptions
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The stock pays no dividends during the options life
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European exercise terms are used
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Markets are efficient
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No commissions are charged
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Interest rates remain constant and known
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Returns are lognormally distributed
This model is commonly used for the pricing of stock options.
The 'Black (1976)' option valuation model was developed to address the problem that forward prices do not exhibit the same non-randomness of spot prices. The model is widely used for modelling European options on physical commodities, forwards and futures.
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The Black-Scholes and Black 1976 formulas takes the following factors into account:
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Spot Price
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Strike Price
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Time Until Expiry
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Volatility
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Risk-Free Interest Rate
They can also be used to calculate implied volatility if the call or put price is known
The default formula is Black & Scholes however by selecting the checkbox the calculator will instead use the Black 1976 formula. For information on how to use the calculator and the option terminology used, click on the help link at the bottom.
Use the Sucden Option Calculator popup: 
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