# Itô's Lemma

*Quant & Pricing — Finicade finance glossary*

The chain rule for random processes — how to find the change in a function of a wandering price. Its famous extra term, from the wiggle of Brownian motion, is what makes derivatives pricing work.

**Also known as:** it-s-lemma, ito's lemma, itos lemma, derivatives-and-taylor

**Related terms:** [Brownian Motion](https://finicade.com/glossary/brownian-motion), [Black–Scholes PDE](https://finicade.com/glossary/black-scholes-pde), [Stochastic Process](https://finicade.com/glossary/stochastic-process)

**Taught in:** Math Masters — Brownian Motion & Itō's Lemma

Source: https://finicade.com/glossary/itos-lemma