Abstract: In this modern world, the finance has become imperative factor for financial eco system to be efficient with that the investment has also equal importance and it’s an opportunity for every business and individual, one among them is option. Option pricing is a crucial factor for hedging and speculative activates. Value determination plays a decisive role for an option writer in financial eco system to maintain the balance and stability for the investors. Where Black-Scholes option pricing model is a widely accepted by the investor and research community for check the reliability European options pricing which available in the market. this study is an attempt to test empirically the relevance of B-Scholes options pricing model in Indian Derivative market with specific reference to select metal stock options. Results of the paired sample T-test revealed that there is no significant difference between the expected option prices calculated thorough Black-Scholes Model and market price of options for majority call option contacts but visa versa for put option contacts, in three out of six cases. It can be inferred that model is relevant for metal stocks. So the investor can always employ the B-Scholes model for their investment strategies.
Keywords: Finance, Eco system, option, call, put, Black-Scholes, model, investor.
Title: AN EMPIRICAL STUDY OF OPTION PRICING BY USING BLACK-SCHOLES MODEL FOR SELECT STOCKS OPTIONS FROM INDIAN STOCK OPTION MARKET
Author: Asst.prof. SRIYANK LEVI, Asst. Prof. BR NARASIHA MURTHY, Asst.prof. SARAH MERLYN
International Journal of Interdisciplinary Research and Innovations
ISSN 2348-1218 (print), ISSN 2348-1226 (online)
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