Content about “Black-Scholes equation”

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Physical finance

The fact that a sizeable proportion of the financial workforce is made up of physicists is one of the industry's best-kept secrets. We talk to Laura Tadrowski, who has made the leap from physics to finance.
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Electronic board with listings saying sell

A risky business: how to price derivatives

In the light of recent events, it may appear that attempting to model the behaviour of financial markets is an impossible task. However, there are mathematical models of financial processes that, when applied correctly, have proved remarkably effective. Angus Brown looks at one of these, a simple model for option pricing, and explains how it takes us on the road to the famous Black-Scholes equation of financial mathematics, which won its discoverers the 1997 Nobel Prize in Economics.

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