Tools of the traders

Technology

Derivatives trading has always been heavily dependent on technology, from the days when electronic calculators were tasked with pricing the first options using the Black-Scholes formula in the 1970s, to the early attempts to model value-at-risk on basic IBM desktop computers the following decade. Since then, the evolution of technology for derivatives and risk management has assumed the look and feel of an arms race, with banks adopting ever more sophisticated models to give them an advantage