Are you looking to determine fair prices for stock options? The Black Scholes Model, a financial theory, has helped people do just that for more than 30 years. This model includes five input variables, which are the strike price of a stock, the current price, the time to expiration, the risk-free rate, and the volatility surface. In order for the the Black Scholes Model to work, you need to assume:
https://volatilitysurface.joomla.com/8-breaking-down-the-black-scholes-model
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