# Geometric Brownian Motion

*Quant & Pricing — Finicade finance glossary*

The standard model for a stock price: random Brownian shocks applied to percentage changes, so the price wanders but never goes negative. It's the engine under Black–Scholes and most Monte Carlo pricing.

**Also known as:** geometric brownian motion, gbm, fx-as-gbm

**Related terms:** [Brownian Motion](https://finicade.com/glossary/brownian-motion), [Black–Scholes Model](https://finicade.com/glossary/black-scholes), [Lognormal Distribution](https://finicade.com/glossary/lognormal)

**Taught in:** Quant Quest — The Black–Scholes–Merton Model

Source: https://finicade.com/glossary/gbm-model