How are vBids Priced?

vBids are priced using the Black-Scholes formula. While you do not need to know the specific formula to trade options, know that the price of the option is calculated with the following variables:

1. The underlying asset's current price
2. The underlying asset's volatility
3. The strike price of the option
4. The option's time to expiration
5. The risk-free interest rate

Remember - with vBids, the trader only needs to select a volatility and vBids take care of the rest. vBids automatically calculates the price of the option by inputting all the other variables into the equation in real time. If the price of the underlying NFT changes or any other variable changes, vBids takes it into account to ensure the option is priced correctly.

For more information on Black-Scholes, check out the following links:

• Black-Scholes at 50: how a pricing model for options changed finance
• Black-Scholes Model
• Introduction to the Black-Scholes formula | Finance & Capital Markets | Khan Academy