ELI5: Explain Like I'm 5

black scholes model

The Black Scholes model is used to calculate the price of stocks and other investments. It uses math and statistics to predict how much a stock or other investment should cost. It's like a complex formula that takes into account things like how much the stock has gone up or down in the past, and how much time there is until you have to sell the investment. This helps people decide when to buy and sell their investments.