In this chapter, we discussed the Black-Scholes-Merton option model in detail. In particular, we covered the payoff and profit/loss functions and their graphical representations of call and put options; various trading strategies and their visual presentations, such as covered call, straddle, butterfly, calendar spread, normal distribution, standard normal distribution, and cumulative normal distribution; delta, gamma and other Greeks; the put-call parity; European versus American options; and the binomial tree method to price options and hedging.

In the next chapter, Python Loops and Implied Volatility, first we will discuss several types of Python loops. Then, we will explain how to find the implied volatility for a call or put option. In addition, we will explain how to download real-world option data from several public available sources. Using that data, we will estimate implied volatility, volatility skewness, and their applications.