Options & DerivativesAdvanced
Black-Scholes Model
The Black-Scholes model is a mathematical framework for pricing European-style options, providing closed-form formulas that revolutionized derivatives markets when introduced in 1973.
14 min read
Quant Finance Glossary
Essential concepts for quant trading, research, and interviews — explained clearly.
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Options & DerivativesAdvanced
Volatility Smile
The volatility smile is the observed pattern where implied volatility varies across option strike prices, forming a U-shaped curve that contradicts the constant-volatility assumption of Black-Scholes.
9 min read
Options & DerivativesAdvanced
Risk-Neutral Pricing
Risk-neutral pricing is a framework that prices derivatives by assuming all investors are risk-neutral, allowing expected payoffs to be discounted at the risk-free rate regardless of actual risk preferences.
11 min read
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