High-Resolution Path-Integral Development of Financial Options

We generalize the functional form of the diffusion of the Black Scholes process and consider multi-factor models including stochastic volatility. Daily Eurodollar futures prices are fit to diffusions using methods of global optimization, Adaptive Simulated Annealing (ASA). These short-time fitted distributions are then developed into long-time distributions using a robust non-Monte Carlo path-integral algorithm, PATHINT, to generate prices and derivatives used by option traders