Black-Scholes-Merton Model
Jo
sometimes very complicated model demine us . Here’s a simplified visual that turns a complicated model into something intuitive and easy to follow. Hope it helps everyone or some people and happy trading .
The picture is AI generated using Gemini with prompts and it make understanding when to sell which a lot of people want to know . So I hope this chart is useful to you all.
In summary , the diagram uses a simple color-coded system to illustrate volatility:
1 Standard Deviation (68.2% probability): Indicates that the asset price is stable, suggesting you should HOLD.
2 Standard Deviations (95.4% probability): Indicates moderate volatility, signaling you should CONSIDER SELLING.
3 Standard Deviations (99.7% probability): Indicates extreme price volatility, signaling a strong SELL or ACTION position.
Happy Hari Raya Haji to all Muslim friends !
@Shyon here's dedicated to u for introducing how to make nice graphics
Modify on 2026-05-29 06:27
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- e13v3n·05-27TOPHow does the 3 standard deviation correspond to 99.7 probability?1Report
- Shyon·05-29 10:18TOPThanks for sharing, glad that you able to generate such a great graphic, bravo!2Report
- BillionaireN·05-27 23:17Formulae as suchLikeReport