What Is an Option Pricing Theory?

Option pricing theory is one of the most basic research topics in finance. In 1973 (the Chicago Options Exchange was founded in the same year, the American scholar Blake <Black, F.) and American scholar Scholes (MS) co-published a well-known article on option pricing, and since then, a major breakthrough has been achieved in option pricing theory.

Option pricing theory

Right!

Option pricing theory

Option pricing theory includes the following:

1. Parity relationship of buy-sell options,

2.The optimal execution plan for American-style buy options.

3.Black-Shoals option pricing model.

4.Black-Shoals analysis.

5. Black-Shoals option pricing partial differential equations, etc.

Research on option pricing theory began in 1900, when French mathematician Bachelier (L.) wrote a paper at the University of Paris called "Theory of Speculation." , Derived many mathematical results about the diffusion process, which was five years earlier than the German-American scientist Einstein (A.) discovered the mathematical theory of Brownian motion.