The Higher They Climb . . .
FISCHER BLACK AND MYRON SCHOLES JOINED THE UNIVERSITY of Chicago at a judicious time. On April 26, 1973, just one month before Black and Scholes’s article was published, the Chicago Board Options Exchange (CBOE) opened its doors.
With a myriad of possible exercise prices, exercise dates, and option prices, it would be impossible to have a market for stock options without some kind of standardization. The CBOE was the first exchange in the United States to list standardized options for trading. Its founders decided that the exercise dates would be the Saturdays immediately following the third Fridays of the four settlement months. The first two settlement months are the current month and the next, if the ...