Assumptions of the BSOP Model:

Efficient Markets: The BSOP model assumes that markets are efficient, meaning there are no arbitrage opportunities and all relevant information is reflected in the prices.
Continuous Trading: The model assumes that trading occurs continuously without any trading restrictions or transaction costs.
No Dividends: The BSOP model assumes that the underlying asset does not pay any dividends during the option’s life.
Constant Risk-Free Rate: The risk-free interest rate is assumed to be constant over the option’s life.
Log-Normally Distributed Returns: The model assumes that the returns on the underlying asset follow a log-normal distribution.
No Market Frictions: The model assumes that there are no taxes, transaction costs, or restrictions on short selling.