New stochastic volatility model revolutionizes pricing of equity derivatives.
A new model called the α-Hypergeometric Stochastic Volatility Model has been developed for pricing equity derivatives. This model addresses issues with existing models like Heston by defining new rules for how stock prices and volatility change over time. The model can accurately price European options and volatility derivatives. It ensures that stock prices behave predictably and can be easily implemented for practical use.