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In the Black-Scholes options pricing formulas one parameter that cannot be directly observed is the volatility of the stock price. If actual market data of the price V are known, then the volatility can be viewed as unknown and can be calculated via the implicit equation (),,,,,0VvSTtKrσ−=.
The volatility σplays the role of the unknown parameter. The volatility σdetermined in this way is called implied volatility and is the root of the equation()(),,,,,0fVvSTtKrσ σ =− = . Iterative methods such as Newton’s method, can then be used to find the root. In this work we propose an approach that uses a genetic algorithm to find the implied volatility.
Keywords: option pricing, implied volatility, genetic algorithm

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