The Black-Scholes model for pricing options uses a log normal distribution for the price of securities, not a normal standard distribution. While this may not seem correct, there is a good explanation for it. That is, the price of a security can not go below 0.
Today, Tom Sosnoff and Tony Battista are joined by Jacob Perlman as he explains why the Black-Scholes model uses the inputs that it does. Jacob discuss all of the math around why using a log normal distribution makes more sense than using standard deviations and he covers the difference between the two!