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Option Pricing Model

As I mentioned on the Home page of this website, I trade options seriously.  I have developed several option pricing models based on the Black-Scholes pricing methodology and use them to determine:

  • Potential profit or loss

  • Exit points

  • The probability of a successful trade

The spreadsheet calculates the option value given the following inputs:

  • Price of the underlying asset, ie, stock or ETF

  • Strike price

  • Implied volatility - calculated* on broker’s option chain

  • Dividend yield expressed as a percentage

  • Risk-free interest rate

  • Days to expiration

Below is a video of how the model works.

*  Implied volatility is commonly derived from the price/value of a particular option, which is determined based on supply and demand;  therefore, implied volatility is a “plug” amount that evaluates to the current theoretical option price.  Since the market is efficient but seemingly moves in an “emotional” way, Black-Scholes provides a theoretical value given ones market forecast for:

  • Price of the underlying

  • Volatility, and

  • Term of the trade

Single Option Pricing Model

Free Download - Opens as a Google drive link; then simply click on the download icon in the top right-hand corner

This template contains both:

  • An Option Pricing Model, and

  • An Option Forecast Model

You can price an option at the inception of the trade and forecast its price as the trade progresses.

Option Traders Template

Trial Version


  • Free download

  • Ten (10) day evaluation period

  • Up to ten (10) trades can be entered

  • Not historical data can be input

  • Same features as 'Deluxe' version

Please Note:  The Trial Version is for the Option Traders Template ONLY; the MTM Election and the Tax Reporting templates have no Trial Version - Please watch the video tutorials for more information.


Please read the End User License Agreement BEFORE your purchase and click here to see how to setup the Option Traders Template as a Trusted Document.

Free Download - Opens as a Google drive link

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