TingTing

Alternative models than Black-Scholes?

Quantitative Model


I attended a seminar recently. The speaker said people no longer use simple Black-Scholes setting in Wall Street. They add in different volatility models to capture the irregular up and downs of price movement.

I only learned Black-Scholes model in university. I am really confused now so please help me find a book or source that explains how derivatives are generally modeled in the real market.
 
Darius

Black-Scholes model is pretty well known and simple that doesn't cut it...

It sounds like you don't need to understand a few models, but that you need an overview of the field

http://www.amazon.com/Volatility-Surface-Practitioners-Guide-Finance/dp/0471792519