As the BS formula is not that useful in the real-world transaction for the option pricing. I want to know, in the daily transaction, what are the realistic approach the traders are employing to calculate the price of options. Thanks!

Thanks Quantie. Do you think if the FED buys too much TIPs and injects liquidity in the market, the fact will also strengthen the inflation expectation?

Thanks you Quantie! Could you pls explain a bit more bout " look at the incremental purchase of TIPS as part of QE vs new supply of TIPS". Thanks!

As I understand the FED considers the employment and inflation expectation when defining the monetary policy. I wonder what is the quantitative indicator or traded instrument FED uses to derive this expectation of inflation? I don't believe the Break Even Inflation is a good explanation, because thi...

Thank u so much Bearish!

@ppauper Thank you so much for your explanation. 

Could anyone explain what leads to the spread between WTI and BRENT oil price, and what will be the upper limit of the spread to cause export of oil from US to other country. 

Thanks!

Hi everyone! 
I've heard a relation which says that if the actual inflation is lower than the inflation expectations, then the price of Tips and gold goes up, and vice versa. Could anyone explain the logic behind this phenomenon?
Thanks! 

Dear Paul, thank u very much for your quick reply and now I finally understood the issue and get more interest in studying with your masterpiece. Thanks!

Hi everybody! I'm reading the chapter 3 about option pricing in "FINANCE Paul Wilmott Introduces Quantitative Finance" , in 3.17 VALUING BACK DOWN THE TREE,  an example says" with S = 100, δt = 1/12, r = 0.1(risk free rate), and σ = 0.2... Using these numbers we have u = 1.0604, v = 0...