Imagine you hold a call option that lets you buy a stock at a fixed price. How much is that right worth today? The Black-Scholes-Merton model answers this question with a neat formula that changed finance. In this chapter we’ll walk through the model’s assumptions, learn the famous pricing equation, see how dividends fit in, and find out what option prices can tell us about the market’s fear and calm — through implied volatility and the VIX.