Things that they cared about, and I would assumeĮspecially options traders had a sense of the things It was a major part ofįinancial markets already, but there was no really good way of putting our mathematical minds around how to value an option. They had been trading them, they had been buying them, they had been selling them. Trading stock options, or they've been trading optionsįor a very, very, very long time. Series of videos on that, is that people have been
The reason why this is such a big deal, why it is Nobel Prize worthy, and, actually, there's many reasons. Gentlemen would have won the Nobel Prize in Economics, except for the unfortunate fact that Fischer Black passed awayīefore the award was given, but Myron Scholes and Bob Merton did get the Nobel Prize for their work. Modern interpretations of the Black-Scholes ModelĪnd the Black-Scholes Formula. Took what Black-Scholes did and took it to another level to really get to our The Black-Scholes Formula and that's why it has their name. They really laid theįoundation for what led to the Black-Scholes Model and
Voiceover: We're now gonna talk about probably the most famousįormula in all of finance, and that's the Black-Scholes Formula, sometimes called theīlack-Scholes-Merton Formula, and it's named after these gentlemen.
