Implied volatility explained: Solver and Newton-Raphson (Excel)

Implied volatility is a fundamental concept in options trading and option pricing. Today we are investigating the calculation of implied volatility based on real-world option prices and two methods - a numerical Solver optimisation and a Newton-Raphson iterative procedure that makes use of option vega.
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You can find the spreadsheets for this video and some additional materials here: drive.google.com/drive/folders/1sP40IW0p0w5IETCgo464uhDFfdyR6rh7
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[@melisaesgici2254]

Thank you so much for this video! !!!!! Very helpfull!!

[@stephenhobbs948]

Great video, very interesting.

[@amitkumarsingh4489]

excellent video as usual

[@pooascyrous5722]

Good job!

[@aaronsarinana1654]

Nice video!

[@armellbtk2007]

Thanks a lot

[@anchitsharma4585]

What is the risk free interest you have taken in order to calculate call and put values for both the strike prices ?

[@SumanPaul1235]

Thanks man 😊

[@ankurmukherjee8081]

Great content. Quick question: US stock options are American. Will it be okay to use BS ? For call it’s fine but put?

[@user-vy5uy9fo8p]

No, use the GBM model to create thousands of simulated paths the price can take, then for each path throughout the steps compute the discounted back value of ITM options. So now you will be left thousands of discounted back options value at t=0. The expectation (mean) of those thousands of option value is your american option value.