#3,536 in Business & money books
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Reddit mentions of The Black-Scholes Model (Mastering Mathematical Finance)
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Reddit mentions: 1
We found 1 Reddit mentions of The Black-Scholes Model (Mastering Mathematical Finance). Here are the top ones.
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The equation you posted is the full Black-Scholes PDE and the equation you're talking about is presumably a solution to the above PDE. Asking what each of the terms is probably isn't the right question, if that's the kind of info you want you should take a step back and look up a full derivation. There's a pretty common text out there by Marek Capinski (The Black-Scholes Model) that walks through the derivation but unless you have a math background it will be beyond you -- but if you don't have a math background, looking at the full PDE also will be beyond you so.... yeah. You can probably find derivations online as well for free, but I don't have a link to one and can't recommend any.
Just as far as terms, S is probably the price of the stock, sigma is usually the volatility, r would be the risk free rate, t would be time, and V is probably the price of the option.
Right side and left side isn't the right way to look at an equation like this, you need to look at all the terms because you're looking for a solution that satisfies all of it, not two halves that you're trying to match up. If you look at different derivations, they'll likely have the terms organized differently. Probably lots of them isolating V or maybe everything set equal to zero.