Use of the Black and Scholes model in the pricing of purchasing options based on the index of the Iraq Stock Exchange for the period from 6/2 to 25/2/2019

Abstract

Due to the increasing number of interested investors in the rights of options, it is necessary to highlight this section of the financial markets, and that one of the main reasons for increasing the attractiveness of investors in this type of market is the reduction of capital required to invest in it, and contribute to maximize their profitability if true (Investors 'profits are unlimited) and reduce their losses to a certain extent (investors know in advance the amount of their losses before the turnout of investment) if their expectations are unhealthy. Investors' losses are determined by the amount of the bonus they pay to the contract editor, After the pricing of the contracts of the rights of the purchase choice, they will be certain of the size of the losses they will incur if their expectations for the future are incorrect, and many techniques of technical analysis help investors to predict the future prices of securities or financial indicators. In the research is the relative strength index, and through this indicator, investors can determine whether the prices in the stock market sold at high or low prices, contributing to the impact on the value of the index of the stock market, so the prospect of the future helps investors In making their investment decisions to buy buying rights in the event of higher prices in the future. Conversely, the expectation of lower prices in the future investors are selling purchase rights rights contracts, and thus achieve profits in both cases.Keywords: Black & Schulz model, RSI, financial choice, pricing of purchase choice.