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Black-Scholes Calculator
Theoretical European option price via Black-Scholes formula.
Enter values to see your result
Frequently asked questions
Does Black-Scholes work for Indian options?
Indian index options (Nifty, BankNifty) are European — BS applies. Stock options in India are American (early exercise possible) — BS is a close approximation.
Why don't market prices match BS?
Volatility smile — IV varies across strikes. OTM and ITM options trade at higher IV than ATM. BS assumes constant σ — reality is more nuanced.
What is implied volatility?
The σ that makes BS price equal the market price. Reverse-solve the formula. "Implied" by market, not calculated from history.
Does BS handle dividends?
This calc uses q (continuous dividend yield). For discrete dividends, subtract PV of dividends from spot.