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Options have been traded for hundreds of years, but investment decisions were based on gut feelings until the Nobel Prizewinning discovery of the Black-Scholes options pricing model in 1973 ushered in the era of the quants.” Wall Street would never be the same.

...more
In *Pricing the Future*, financial economist George G. Szpiro tells the fascinating stories of the pioneers of math

Hardcover, 336 pages

Published
November 29th 2011
by Basic Books
(first published November 1st 2011)

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(showing
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254)

- the story was littered with what seemed irrelevant biographical trivia of the authors. If there *was* a story or common theme behind this, I didn't get it.

- the prose is a bit clumsy and full of clichés.

- there's really hardly any history of ideas, putting the development of the options pricing formula in context. That's sad.

- oddly, and very much to my disappointment, the autho ...more

One of the major intellectual achievements of the 20th century was the theory of option pricing. This is its story, and it’s absolutely fascinating. Options have been around since the buying and selling of tulips and the very first efforts of investors to control their downside risk. But the economic value of such protections was not finally understood until the Nobel Prize winning research of Fischer Black, Myron Scholes, and Robert Merton in the 1970’s. It could not have happened ...more

Options are a form of derivative (no actual commodity or security changes hands) where one gains the ability to buy or sell something at a future date and ...more

From the tulipomania of Holla ...more

the book is a cut and paste of many little stories from the past.

Nothing new.

The author seems to think the Black scholes equation is something important,

1. the key part of the equation is Implied volatility,

something not listed in the index.

2. What is implied volatility?

It's a fudge factor in the equation to make things work,

but the fact is, no one can know what IV is without knowing first,

what the price of an option is.

In theory, the B ...more

Jul 26, 2012
Brian
rated it
3 of 5 stars

Recommended to Brian by:
the economist

Shelves:
from-the-economist

(3.5) Well-written history (emphasize history) of Black-Scholes

Traces the history of the formula to value stock options from the very beginning (issuing of stock, development of futures, tulipomania etc.). All good stuff, but for a few glaring typos, particularly in chapter 16 or 17 (missing words, use of a subscript instead of superscript on a particular term in text describing the formula). Some careless stuff in there.

So good history, well-told and enjoyable. But we're really light on the mat ...more

Traces the history of the formula to value stock options from the very beginning (issuing of stock, development of futures, tulipomania etc.). All good stuff, but for a few glaring typos, particularly in chapter 16 or 17 (missing words, use of a subscript instead of superscript on a particular term in text describing the formula). Some careless stuff in there.

So good history, well-told and enjoyable. But we're really light on the mat ...more

I really should read this book over again so I understand it completely

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George G. Szpiro is an Israeli-Swiss applied mathematician and journalist, who has emerged as a writer of popular science books.

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