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Level 25 · ◆◆◆◆◆ · ~14 min

Local & Stochastic Volatility

Beyond constant vol: smiles, local vol, and stochastic vol.

"The market's volatility isn't a number — it's a surface."

volatility smile/skewDupire local volatilityHeston modelforward variancelocal-stochastic vol
🚀 You're jumping ahead. This builds on The Black–Scholes–Merton Model · Risk-Neutral Pricing — but play it now and you'll still earn full XP. If it feels steep, those make a gentler on-ramp.

A short lesson, then a quiz. ❤️×3 — a wrong answer costs a heart; finish with at least one left and the level is yours. Lose all three and you'll have to try again. Replay any time — XP and cleared levels are never lost.