SABR Model
Also called: SABR, stochastic alpha beta rho
SABR is the market-standard model for interest-rate smiles, with four intuitive parameters controlling level, backbone, volatility of volatility and correlation. Its dominance comes from a closed-form approximation that converts parameters straight into implied volatility, so a trader can fit a smile in milliseconds. The approximation degrades at very low or negative rates, which forced the shifted and normal variants now used across rates desks.
Where this is taught
Definitions are the trailer. These free levels turn SABR Model into something you play — one bite-size lesson, with worked examples, a quiz and XP.