How to calculate option price

#1
Please help me to use the option calcualtor

Black -Scholes opthon calculator

There are three things I don't undersdtand in the calculator
1.time to expiration
Should I need to include saturdays and sundays/ holidays or not?

2.Annual interest rate
Is it a constant? Is it varies every day?
How to calculate this?

Is there any website , where I can get these info easily?

3. volatility
Is it a constant? Is it varies every day?
How to calculate this?

I request to help me.
Thanks
 
#2
Hello ,

1. Time to expiry : All standard calculators will take day to expiry

2. Interest rate : Simple interest rate u would get for putting money in FD per annum for e.g. 5% . ... thought its not supposed to be constant , it depend on inter bank lending rate and other forward instruments based on interest rates

3. Volatility : Its the implied volatility and not realized volatility , so basically option price should give you the implied volatility and then you should use it to calculate your heding parameters like delta gamma etc ..

FV could be calculated dynamically with market moves using taylor series expansion
 

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