What does N(d1) mean?
What does N(d1) mean?
The explanation of N (d 1) is a bit more complex. We begin with the expected value of the contingent receipt of stock. The expected value of the receipt of the stock is contingent on the exercise of the option.
What is the difference between N(d2) and n(n)n for options?
N is just the notation to say that we are calculating the probability under normal distribution. D2 is the probability that the option will expire in the money i.e. spot above strike for a call. N (D2) gives the expected value (i.e. probability adjusted value) of having to pay out the strike price for a call.
What does N(d2) mean in Black Scholes model?
N (d 2) is the risk adjusted probability of the Black Scholes Model that the option will be exercised. Receipt of stock and N (d1) The explanation of N (d 1) is a bit more complex. We begin with the expected value of the contingent receipt of stock.
