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calibrate Heston Model Skip Option Price

Posted: November 22nd, 2011, 2:23 am
by quantcook
i know there's an analytical solution for heston model on option price, but now if I have the vol surface somehow, is there a way to skip calculating the c/p price to calibrate the surface?i guess there should be such a way, but is there a paper on this?

calibrate Heston Model Skip Option Price

Posted: November 22nd, 2011, 8:13 am
by Antonio
Hello Quantcook,There is no closed-form / analytical representation for the implied volatility in Heston, so you have to go via the Call/put price first.