Dr Fischer
Black and Dr Myron Scholes were two mathematicians who, in 1973, worked out an
econometrical model for options pricing (the
premium on an option). It was based on data
from the Chicago Board Options Exchange (CBOE), which was then offering options
on sixteen commodities and securities, though not on gold.
The formula applies equally
to gold and is the basis of most premium calculations; and a variation of it is
also used for delta hedging ratios. Their
work won the Nobel Prize for Economics in 1997.