# Is there a relation between the so-called volatility drag and the sigma term in Black-Scholes' model? [duplicate]

The closed-form solution of Black Scholes Dynamics $$dS_t=S_t(\mu dt +\sigma dW_t$$) is $$S_t=S_0 e^{(\mu -\sigma ^2/2) t+\sigma dW_t}.$$

The $$-\sigma^2/2$$ term is quite similar to the volatility drag when transforming an arithmetic return to a geometric return. Are there any relationship between the two?