About the Options Premium Calculator
What is the Options Premium Calculator?
This option price calculator uses the Black–Scholes model, which suits European-style options such as Nifty and Bank Nifty index options. It splits each premium into intrinsic value and time value.
Implied volatility has the biggest effect: higher volatility means more expensive options.
How to use the Options Premium Calculator
- Spot Price of the Underlying (₹) (sample: 25,000)
- Strike Price (₹) (sample: 25,200)
- Days to Expiry (sample: 14)
- Implied Volatility (%) (sample: 14)
- Risk-Free Rate (%) (sample: 6.5)
- Dividend Yield (%) (sample: 0)
- Press Price the Option (results also refresh as you type). The result card shows the Call Option Price, along with Put option price, Call intrinsic value, Call time value and Put intrinsic value.
Formula used
Call = S e^(−qT) N(d₁) − K e^(−rT) N(d₂); Put = K e^(−rT) N(−d₂) − S e^(−qT) N(−d₁)
- d₁ = [ln(S/K) + (r − q + σ²/2)T] ÷ (σ√T)
- d₂ = d₁ − σ√T
Model prices differ from market prices when volatility differs across strikes (the volatility smile).
Worked example
These are the sample values already filled in the calculator above, and the result it returns for them:
| Input | Sample value |
|---|---|
| Spot Price of the Underlying (₹) | 25,000 |
| Strike Price (₹) | 25,200 |
| Days to Expiry | 14 |
| Implied Volatility (%) | 14 |
| Risk-Free Rate (%) | 6.5 |
| Dividend Yield (%) | 0 |
| Result | Value |
|---|---|
| Call Option Price | ₹211.03 |
| Put option price | ₹348.28 |
| Call intrinsic value | ₹0 |
| Call time value | ₹211.03 |
| Put intrinsic value | ₹200 |
| Chance the call expires in the money | 41.6% |
| Model | Black–Scholes (European options, like Nifty index options) |
Tips for using the Options Premium Calculator
- Time value decays fastest in the last few days before expiry.
- Use the India VIX as a guide to Nifty implied volatility.