This online calculator uses the Black-Scholes equation for the fair value of a European call option* on a non-dividend paying stock, as follows:
A European call option can only be exercised on its expiration date. This is in contrast to American options that can be exercised at any time prior to expiration.
A European option is used in order to reduce the variables in the equation. This is acceptable, since most U.S. company stock options are not exercised until their expiration (vesting) date. Why? When an employee exercises a call early, he or she forfeits the remaining time value on the call and collects only the intrinsic value.