Option Pricing: Theory and Applications

Abstract

This is a textbook on Mathematical Finance for postgraduate students and bank practitioners. The course specifies on option pricing theory in addition to focussing on mathematical models as well as detailing some of their applications. Our aim is to make some of the most fundamental articles written throughout the evolution of mathematical finance more accessible to readers. We site the main results of these influential articles, while detailing the steps used to reach those conclusions and giving proof when necessary. We teach all the necessary mathematical tools concerning basic algebra, probabilities and stochastic calculus, lest the reader need to consult a probability-based textbook.