BlackScholesCallPrice {Dowd} | R Documentation |

## Price of European Call Option

### Description

Derives the price of European call option using the Black-Scholes approach

### Usage

```
BlackScholesCallPrice(stockPrice, strike, rf, sigma, t)
```

### Arguments

`stockPrice` |
Stock price of underlying stock |

`strike` |
Strike price of the option |

`rf` |
Risk-free rate and is annualised |

`sigma` |
Volatility of the underlying stock |

`t` |
The term to maturity of the option in years |

### Value

Price of European Call Option

### Author(s)

Dinesh Acharya

### References

Dowd, Kevin. Measuring Market Risk, Wiley, 2007.

Hull, John C.. Options, Futures, and Other Derivatives. 5th ed., p. 246.

Lyuu, Yuh-Dauh. Financial Engineering & Computation: Principles, Mathematics, Algorithms, Cambridge University Press, 2002.

### Examples

```
# Estimates the price of an American Put
BlackScholesCallPrice(27.2, 25, .03, .2, 60)
```

[Package

*Dowd*version 0.12 Index]