Within our mini-series that is breaking down the Black-Scholes Model, we now find ourselves knee-deep in working through the Greeks. What we began to see last week with delta, and continue to see today with theta, is that all these Greeks can be found by taking partial derivatives of the BSM with respect to different variables. Today, we force Frank back into the studio to help us try and make some sense of the formula(s) behind theta.
You can watch every part of the Black-Scholes series below:
Part One: Pricing a Call
Part Two: Pricing a Put
Part Three: Probability Density Functions: Part One
Part Four: Probability Density Functions: Part Two
Part Five: Standard Normal Variables
Part Six: Z-Scores
Part Seven: Differentiating Delta
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