Option Volatility and Pricing

It probably seems strange for an author to wait 20 years to revise a professional publication, especially one that has been continuously in print over the entire period.To those of you who were hoping for at least one revision in the intervening years, I can only offer my apology and the excuse that other obligations prevented me from undertaking such a revision.

Much has changed in option markets over the last 20 years. Most markets are now fully electronic, and the days of floor trading are clearly numbered. Only in the United States do optiontrading floors still exist, and even those are inevitably giving way to electronic trading. Twenty years ago, organized option markets existed only in the major industrialized nations. But as the importance of derivatives as both an investment vehicle and a risk-management tool has become widely recognized, new option markets have opened in countries around the world.