Does anyone know a no-arbitrage proof that call option delta has to be between 0 and 1? We know that Black Scholes model N(d1) tells us that it is between 0 and 1, but is there a no-arbitrage argument?
Define "correct". Aren't all models approximations? Some are good/realistic approximations, others are mathematically interesting but may not be appropriate to explain a particular phenomenon.Thanks a lot. The deeper I go into models, the more I ask myself, "how do we know our models derivations/results" are correct. Sometimes getting confused between real financial markets and mathematical models