This is a simple C++ program that calculates the price of a European call option using the Black-Scholes option pricing model. The Black-Scholes model is a widely used mathematical model for pricing European-style options.
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First, clone this repository to your local machine using the following command:
git clone <repository_url> -
Navigate to the cloned repository directory and compile the C++ program using a C++ compiler (e.g., g++):
g++ option_pricing.cpp -o option_pricing -
Execute the compiled binary to run the program:
./option_pricing -
Input Parameters: The program will prompt you to enter the following input parameters for the option pricing calculation:
- Stock Price: Current price of the underlying asset in GBP (£) per share.
- Strike Price: The price at which the option can be exercised in GBP (£) per share.
- Risk-Free Interest Rate: The annual risk-free interest rate as a percentage (%).
- Volatility: The annualized standard deviation of log returns of the underlying asset as a percentage (%).
- Time to Expiry: The time to expiration as a percentage (%) of a year.
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After entering the input parameters, the program will calculate the price of the European call option using the Black-Scholes model and display the result as "Option Price."
This program is for educational and illustrative purposes only. The Black-Scholes model is a simplified mathematical model and may not accurately reflect real-world option prices. Options trading involves risks, and you should exercise caution and seek professional advice before making any financial decisions.