Calculate the Estimated Premium of Option Contract
Usage
put.premium.est(s, k, t, sd, r, d = 0)
Arguments
s
Spot Price of Underlying Asset
k
Exercise Price of Contract
t
Time to Expiration
sd
Volatality
r
Risk free rate of return
d
Divident Yield (use cont.rate()), Default: 0
Value
Output gives the Estimated Premium of a Option Contract.
Details
Estimate is calculated based on Black-Scholes Model. The Black Scholes model, also known as the Black-Scholes-Merton (BSM) model, is a mathematical model for pricing an options contract.