Black Scholes, Stochastic Process, Options Trading, Financial Modelling, Differential Equations.
price of the stock option at the time, t. S refers to the spot price of the asset at the time, t. T is the maturity of the option. Time to maturity is defined as T-t. K is the strike price of the option. r, the risk-free interest rate, assumed to be constant between t and T. Equation 2: C(S,t) is