the Black-Scholes model
noun[S]
FINANCE,STOCK MARKETuk/ˌblækˈʃəʊlz ˌmɒd.əl/us/ˌblækˈʃoʊlz ˌmɑː.dəl/(alsothe Black-Scholes option pricing model)amathematicalmethodofcalculatingwhether anoption(= therighttobuyshareswithin aparticularperiodoftime)has afairvalue,basedon thepriceofsimilarshares,interestrates, etc.:
Thenoptionsareawardedon thebasisof the Black-Scholesmodel, whichroughlymeanstheoptioniswortha third of theunderlyingshare.