The Black–Scholes–Merton OPM 50 Years Later

Menachem Brenner ()
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Menachem Brenner: Emeritus, Stern School of Business, NYU, USA

Quarterly Journal of Finance (QJF), 2025, vol. 15, issue 02, 1-15

Abstract: Fifty years have passed since the Black–Scholes–Merton model was first published, revolutionizing the financial world. It has not only been the dominant pricing model for options and financial assets with embedded options, but it has radically changed the way we approach financial theory, financial institutions and corporate finance and operate in capital markets. Today, its use is ubiquitous in risk management across markets and institutions. It also serves as the basis for the Contingent Claims Approach (CCA) applied in corporate finance and across finance overall. The BSM model provides forward-looking information (variances, correlations) across financial asset classes, including equities, fixed income (FI), foreign exchange, commodities, and credit), enabling more timely and dynamic analyses of these respective markets.

Keywords: Black-Scholes-Merton OPM; Volatility; VIX (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1142/S2010139225400063

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