From the Preferences menu, select Edit Default Analytic Parameters, then choose Black Scholes.
Result: The Default Model Parameters dialog box displays.
Enter new parameters in the fields provided, then click OK.
When using Black Scholes as your default model for displaying options, you may change the way in which the Option Interest Rate and Dividend Interest Rate is calculated.
To change the Analytic Parameters
From the Preferences menu, select Edit Default Analytic Parameters, then choose Black Scholes.
Result: The Default Model Parameters dialog box displays.
Enter new parameters in the fields provided, then click OK.
The Option Interest Rate is the short-term cost of capital for the currency in which the option is denominated. For USD-based options, it is usually set to a value like the USD LIBOR rate, the 90-day T-Bill rate, or the nearby Eurodollar rate.
The Dividend Interest Rate is only used for stock index options. It is set to the annual dividend rate of the basket of stocks that makes up the stock index.
The Option ImpVol Price is the data aspect of the option that is used in calculating the ImpVol column.
The Underlying ImpVol Price is the data aspect of the underlying instrument to the option that is used in calculating the ImpVol column.
For the dialog box displayed above, the Option Interest Rate is 5% per year, the Dividend Rate is 3.5% per year, and both prices are set to Recent. The ImpVol column will display the implied volatility calculated using the Recent price for both the option and the underlying instrument for that option. The Recent price is equal to the Last price unless the Last is blank; then Recent is equal to OldSet.