[Bergomi,_Lorenzo]_Stochastic_Volatility_Modeling

This, Reader, is an honest book. It warns you at the outset that it is not a treatise on stochastic volatility. Nor is it a mathematical nance textbook – there are treatises and textbooks galore on the shelves of bookshops and university libraries. Rather, my intention has been to explain how stochastic volatility – and which kind of stochastic volatility – can be used to address practical issues arising in the modeling of derivatives. Modeling in nance is an engineering eld: while our task as engineers is to frame problems in mathematical terms and solve them using sophisticated machinery whenever necessary, the problems themselves originate in the form of embarrassingly practical trading questions.