Black's Model

Dictionary Says

Definition of 'Black's Model'

A variation of the Black-Scholes model that allows for the valuation of options on futures contracts.
Investopedia Says

Investopedia explains 'Black's Model'

In 1976, Fisher Black, one of the developers of the Black-Scholes model (introduced in 1973), demonstrated how the Black-Scholes model could be modified in order to value European call or put options on futures contracts.

Related Definitions

  • Black Scholes Model

    A model of price variation over time of financial instruments such as stocks that can, among other things, be used to determine the price of a European call option. The model assumes ...
    Read More »
  • Futures Contract

    A contractual agreement, generally made on the trading floor of a futures exchange, to buy or sell a particular commodity or financial instrument at a pre-determined price in the future. ...
    Read More »
  • Financial Modeling

    The process by which a firm constructs a financial representation of some, or all, aspects of the firm or given security. The model is usually characterized by performing calculations, ...
    Read More »
    • Option Pricing Theory

      Any model- or theory-based approach for calculating the fair value of an option.The most commonly used models today are the Black-Scholes model and the binomial model. Both theories on ...
      Read More »
    • Merton Model

      A model, named after the financial scholar Robert C. Merton, that was developed in the 1970s and is used today to evaluate the credit risk of a corporation's debt. Brokerage firm ...
      Read More »
    • Financial Modeling

      The process by which a firm constructs a financial representation of some, or all, aspects of the firm or given security. The model is usually characterized by performing calculations, ...
      Read More »
    • Black-Litterman Model

      An asset allocation model that was developed by Fischer Black and Robert Litterman of Goldman Sachs. The Black-Litterman model is essentially a combination of two main theories of modern ...
      Read More »
    • Myron S. Scholes

      An American economist and winner of the 1997 Nobel Prize in Economics along with Robert Merton for their method of determining the value of stock options, the Black-Scholes model. ...
      Read More »

Articles Of Interest

Partner Links