Black–Scholes
Okay kiddo, so let's talk about something called Black-Scholes. It's a fancy way to figure out how much something is worth, like a toy or a candy bar, but instead of toys and candy bars, we use it for stuff like stocks and options.
To explain it in a simple way, let's say you have a toy that you want to sell to your friend. You want to make sure you don't sell it for too little, but you also don't want to ask for too much or your friend might not want to buy it.
Black-Scholes is like a magic equation that helps people figure out how much a stock or option is worth. It looks at things like how much time is left before the option expires, how much the stock is worth right now, and how much people are willing to pay for it.
It might be hard to understand all the details, but just remember that Black-Scholes is a way to figure out how much something is worth, just like you figure out how much your toy is worth to your friend. It helps people make smart decisions when it comes to buying and selling stocks and options.
To explain it in a simple way, let's say you have a toy that you want to sell to your friend. You want to make sure you don't sell it for too little, but you also don't want to ask for too much or your friend might not want to buy it.
Black-Scholes is like a magic equation that helps people figure out how much a stock or option is worth. It looks at things like how much time is left before the option expires, how much the stock is worth right now, and how much people are willing to pay for it.
It might be hard to understand all the details, but just remember that Black-Scholes is a way to figure out how much something is worth, just like you figure out how much your toy is worth to your friend. It helps people make smart decisions when it comes to buying and selling stocks and options.