# The Black-Scholes equation

The Black-Scholes equation is a partial differential equation that describes the price of a financial option over time. It is used to calculate the theoretical price of a call or put option, based on certain assumptions about the underlying asset, the risk-free interest rate, and the volatility of the asset’s price.

The equation was first published in 1973 by Fischer Black and Myron Scholes, who were later awarded…