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Could the value of call/put options in Black Scholes model be negative?
For example,if the NPV of the project is slightly positive but delaying the project will make it worse, i.e. negative.
Thank you in advance!
The worst that can happen is that the value of the options is zero. It cannot be negative.
Usually it will be positive and will therefore make the project better 🙂
Thank you, sir!
You are welcome 🙂