Fisher Black Algorithm

The Fisher Black Algorithm, developed by economist Fisher Black, is a method used to valuate options, which are contracts allowing someone to buy or sell an asset at a predetermined price. This algorithm helps determine the fair price of an option by considering factors like the current price of the asset, the strike price, the time until the option expires, and market volatility. It forms part of the foundations for the more widely known Black-Scholes model, which is crucial in finance for assessing the risk and potential returns of various investment opportunities.