Lita Wulandari Aeli, Rizki Amelia, Andi Daniah Pahrany, Ramdhan Fazrianto Suwarman, Mutia Yollanda, Nicea Roona Paranoan
Stocks have the potential for substantial profits, which attracts investors; however, they also come with significant risks. Purchasing options is one strategy to minimize this risk. An option is a contract between the option buyer (holder) and the option seller (writer) in which the writer gives the holder the right, but not the obligation to sell or buy an asset at a certain price and within a predetermined time period. The purpose of this study is to calculate the price of European-type call and put options on Amazon.com, Inc. shares with a maturity of three months and a variable strike price. The Black-Scholes and Binomial models are the two models used in this study, and the results are compared with market prices. The Black-Scholes model was developed in 1973 by Fisher Black and Myron Scholes while the Binomial model was introduced by J.C Cox, S.A Ross, and M. Rubinstein in 1979. The results showed that the purchase of call option contracts at US$55.00 and US$49.83 and the purchase of put option contracts at US$4.90; US$8.62; and US$13.80 can provide profits for investors. The findings of this study can provide valuable insights for investors and capital market analysts to obtain maximum profits that provides insight into when it is best to buy or sell options. © 2025 American Institute of Physics Inc.. All rights reserved.
Department of Mathematics, State University of Malang Jl Semarang 5, Malang, 65145, Indonesia; department of Mathematics and Data Science, Universitas Andalas, Padang, 25163, Indonesia; Department of Mathematics, Universitas Cendrawasih, Jayapura, 99351, Indonesia
