22.10 European Bond options When valuing European bond options it is usual to assume that the future bond price is lognormal We can then use black,'s model (equations 22.1and22 Both the bond price and the strike price should be cash prices not quoted prices Options, Futures, and other Derivatives, 5th edition 2002 by John C. HullOptions, Futures, and Other Derivatives, 5th edition © 2002 by John C. Hull 22.10 European Bond Options • When valuing European bond options it is usual to assume that the future bond price is lognormal • We can then use Black’s model (equations 22.1 and 22.2) • Both the bond price and the strike price should be cash prices not quoted prices