## Normal

Subtype of Vol TypeVariation of the Black whereby

**that results in**

*dF = σdw***being normally distributed.**

*F(T)***can be then calculated through a formula known as Bachelier formula.**

*E{ max(F(T)-K,0) }*Note that the normal vol determines the absolute size of the fluctuation around the starting value, in contrast to the Black vol that measures the relative deflection.