New model simplifies options trading, making investing more accessible and profitable.
The article discusses how to model volatility in financial markets. Instead of using complex equations for implied volatility, researchers found that using local volatility is simpler and gives the same results. They showed that making local volatility stochastic is just as effective as making implied volatility stochastic. This makes it easier to ensure there are no opportunities for risk-free profits in the market. The new model they propose is easy to use and check for any potential issues.