Binary Option - Black-Scholes Valuation

Black-Scholes Valuation

In the Black-Scholes model, the price of the option can be found by the formulas below. In these, S is the initial stock price, K denotes the strike price, T is the time to maturity, q is the dividend rate, r is the risk-free interest rate and is the volatility. denotes the cumulative distribution function of the normal distribution,

and,