# Black-Scholes vs Blacks model. Which one to use with SABR?

Say I want to compute a call price for a given set of SABR parameters.

I use Hagans approximation and compute $$\sigma_B$$. The rate is not zero. Should I then compute the option price using

Does it matter whether the asset is a forward or not?

• I am 99% sure you have to use the first one. SABR IV is after all obtained by Black's formula. But I am actually not sure. Jul 22, 2019 at 15:20