Journal of Applied Sciences1812-56541812-5662Asian Network for Scientific Information10.3923/jas.2020.104.108Emmanuel FadugbaSundayDami AyegbusiFlorence32020203Background and Objectives: In this study, a bilateral risky partial differential equation model for the European style option is presented. European option is an option contract that can only be exercised at the maturity date. Materials and Methods: The derivation of the model has been obtained by means of a self-financing portfolio. Results: It is clearly seen that the bilateral risky partial differential equation model has few adjustments when compared with the Black-Scholes model. Conclusion: Moreover, the risky partial differential equation has been decomposed into total-valuation adjustments.]]>Canabarro, E. and D. Duffie,2009Arregui, I., B. Salvador and C. Vázquez,2017Kariya, T. and R. Liu,2003Bliss, R.R. and G.G. Kaufman,2006Siadat, M.,2016Pallavicini, A., D. Perini and D. Brigo,2011Green, A.,2015Burgard, C. and M. Kjaer,2010Black, F. and M. Scholes,1973Brigo, D. and M. Morini,2010