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Wycena Crank-Nicolson×Model SABR×
DziedzinaFinanse ilościoweFinanse ilościowe
RodzinaMachine learningRegression model
Rok powstania19472002
TwórcaJohn Crank and Phyllis NicolsonPatrick S. Hagan
TypPDE SolverInterest Rate Model
Źródło pierwotneCrank, J., & Nicolson, P. (1947). A practical method for numerical evaluation of solutions of partial differential equations of the heat-conduction type. Mathematical Proceedings of the Cambridge Philosophical Society, 43(1), 50-67. DOI ↗Hagan, P. S., Kumar, D., Lesniewski, A. S., & Woodward, D. E. (2002). Managing smile risk. Wilmott Magazine, 1, 84-108. link ↗
Inne nazwyCN Method, Implicit Finite DifferenceStochastic Volatility Model
Pokrewne34
PodsumowanieThe Crank-Nicolson method is a widely-used implicit finite difference scheme for solving PDEs in option pricing. It provides second-order accuracy in both space and time, unconditional stability, and can efficiently price derivatives with early exercise features (American options) or complex boundary conditions.The SABR (Stochastic Alpha-Beta-Rho) model is a stochastic volatility framework introduced by Hagan et al. in 2002 for valuing interest rate derivatives. It captures the smile effect in implied volatility through correlated Brownian motions and has become industry standard for swaption and caplet pricing.
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