Theories deal with the world on its own terms, absolutely. Models are metaphors, relative descriptions of the object of their attention that compare it to something similar already better understood via theories. Models are reductions in dimensionality that always simplify and sweep dirt under...

The evolution of a quantitative approach to finance has proceeded through many small but significant steps and occasional large epiphanies concerning the management of volatility.This article outlines how philosophers, physicists, and financial modelers have quantified the notion of derivatives,...