The equation in this document uses the theoretical model developed by Fisher Black and Myron Scholes to estimate the value of options to buy or sell financial assets.
The BLK.SCHLS equation estimates the value of a call or put option. One of the variables in this equation is the standard deviation of the rates of return on the stock. This number is not commonly available. However, the value may be estimated by using one of the following:
A source that publishes Beta statistics for a stock may also publish the standard deviation (or variance, which is the standard deviation squared) of the stock.
A sequence of stock prices at uniform time intervals can be used in the SD.ROR equation, explained later in this document, to calculate the sample standard deviation of the rates of return.