# Closed-Form Solution

*Quant & Pricing — Finicade finance glossary*

A closed-form solution is an exact formula that returns a price directly, with no simulation or grid. Black-Scholes is the famous example, and its speed is why it survives as a quoting convention long after its assumptions were abandoned. Closed forms matter operationally: a desk repricing a million-trade book overnight, or calibrating a model a thousand times, cannot afford a numerical method per evaluation.

**Also known as:** analytic solution, analytical formula

**Related terms:** [Black–Scholes Model](https://finicade.com/glossary/black-scholes), [Monte Carlo Simulation](https://finicade.com/glossary/monte-carlo), [Finite Difference Method](https://finicade.com/glossary/finite-difference-method), [Heston Model](https://finicade.com/glossary/heston-model), [Model Calibration](https://finicade.com/glossary/model-calibration)

Source: https://finicade.com/glossary/closed-form-solution