Black-Scholes pricing.

Options premium calculator uses Black-Scholes formula to price calls and puts. 100 stock at 105 strike, 30 days to expiry, 25% volatility, 4% rate: call premium ≈ 1.05, put premium ≈ 5.71. Premium = intrinsic value (in-the-money portion) + time value (decay over time). Time value erodes faster as expiry approaches (theta decay).

Example: stock at 100, 105 call (out-of-money), 30 days, 25% vol, 4% rate. Black-Scholes call premium ≈ 1.05. All time value (no intrinsic). At expiry: option worthless if stock under 105. Stock at 110 at expiry: option worth 5 (intrinsic). Long-call buyer needs >5.05 stock movement to profit.

Black-Scholes assumptions: log-normal returns, constant volatility, constant rates, European exercise (only at expiry), no dividends. Real markets violate all - so model gives approximation. Actual options often more expensive than Black-Scholes (volatility smile/skew). Useful for: comparing relative option prices, calculating implied volatility, estimating fair value. Most retail trading platforms display Greeks (delta, gamma, theta, vega) computed via Black-Scholes.

Run it with sensible defaults

Using current stock price of 100, strike price of 105, days to expiry of 30, implied volatility of 25%, the calculation works out to 1.17. Nudge the inputs toward your own situation and the output recalculates instantly. The defaults are meant as a starting point, not a recommendation.

The levers in this calculation

The inputs — Current Stock Price, Strike Price, Days to Expiry, Implied Volatility %, and Baseline Rate % — do not pull with equal force. Not every input has equal weight. Flip one at a time toward extreme values to feel which ones move the needle most for your situation.

How the math works

Black-Scholes-Merton formula for European call and put options. The working is transparent — you can verify every step yourself in the formula section below. No black box, no opaque "proprietary model".

Where this fits in planning

This is a "what-if" tool, not a forecast. Use it to test ideas before committing: what happens if the rate is 2% lower than hoped, what happens if you add five more years. The value is in the scenarios you run, not the single answer you get from the defaults.

What this doesn't capture

Steady-rate math ignores real-world volatility. Actual returns are lumpy; sequence-of-returns risk matters most in drawdown; fees and taxes drag on compound growth; and behaviour changes in drawdowns can reduce outcomes below the projection. Treat the number as one scenario, not a forecast.