The Black-Scholes Model Guideline For Options Course As Taught At Notre Dame University - Lebanon

Abstract

This paper presents the methodology used for Notre Dame University’s finance students to explain and explore the Black-Scholes model without going through the complexity of mathematics to model random movements or through stochastic calculus. I will name and develop the steps that I follow in order to allow students to properly use the Black-Scholes model and to understand the relationship of the model’s inputs to the option price while monitoring the risk via delta and gamma hedging.