Black's Model

Filed Under » , , ,
Dictionary Says

Definition of 'Black's Model'

A variation of the popular Black-Scholes options pricing model that allows for the valuation of options on futures contracts. Black's Model is used in the application of capped variable rate loans, and is also applied to price derivatives, such as bond options and swaptions.
Investopedia Says

Investopedia explains 'Black's Model'

In 1976, Fisher Black, one of the developers of the Black-Scholes model (which was introduced in 1973), demonstrated how the Black-Scholes model could be modified in order to value European call or put options on futures contracts. For this reason, the Black model is also referred to as the Black-76 model.

Articles Of Interest

  1.

    Interpreting A Company's IPO Prospectus Report

    Learn to decipher the secret language of the IPO prospectus report - it can tell you a lot about a company's future.

  2. Pin Down Stock Price With Real Options

    How can you assign a value to what a company may do with its business in the future? We explain how it works.

  3. Options Basics Tutorial

    Discover the world of options, from primary concepts to how options work and why you might use them.

  4. Digging Into The Dividend Discount Model

    The DDM is one of the most foundational of financial theories, but it's only as good as its assumptions.

  5. The Fed Model And Stock Valuation: What It Does And Does Not Tell Us

    Learn about this popular stock market valuation model and how accurate it has been over the years.

  6. The ABCs Of Option Volatility

    The mystery of options pricing can often be explained by a look at implied volatility (IV).

  7. Weighted Average Cost Of Capital (WACC)

    Weighted average cost of capital may be hard to calculate, but it's a solid way to measure investment quality

  8. How Interest Rates Affect The Housing Market

    Understand how rate changes can affect home prices, and learn how you can keep up.

  9. Basic Investment Objectives

    You might know about different asset types, but do you know how each type contributes to a particular goal?

  10. Exploring The Current Account In The Balance Of Payments

    Learn how a country's current account balance reflects the country's economic health.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Xenocurrency

    A currency that trades in markets outside of its domestic borders.

  2. Wanton Disregard

    A standard of severe negligence. Wanton disregard is a very serious accusation that indicates that a person behaved extremely recklessly.

  3. Ultra ETF

    A class of exchange-traded funds (ETF) that employs leverage in an effort to achieve double the return of a set benchmark.

  4. Toehold Purchase

    A purchase of less than 5% of a target company's outstanding stockmade by an acquiring company. A toehold purchase of just under 5%, while not a significant stake in a firm, allows the shareholders a "toe-holds" grip on the company and its decision making.

  5. Samurai Bond

    A yen-denominated bond issued in Tokyo by a non-Japanese company and subject to Japanese regulations.

  6. Chartalism

    A non-mainstream theory of money that emphasizes the impact of government policies and activities on the value of money.
Trading Center
http://sp.fastclick.net/ad/tr/10858-64082-15546-0?mpt=a0e76f8c771ebc5fd298f3ffe3a57c39