Black-Scholes option pricing model: Difference between revisions

{{g}}a technique for managing [[Complicated system|complicated risk]] which is the source of a ''lot'' of trouble, especially when used, as it habitually is, to manage  [[complex system|''complex'']] risks. The owners of [[Long-Term Capital Management]], and for that matter, their counterparties and much of the financial system discovered this to their surprise and cost during the Russian crisis of 1998, and again in the Lehman collapse and its aftermath in 2008. It is a lesson that folks are yet to learn.