Why Use Mathematica?
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Because
Mathematica Can Help...
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- Decrease Your Development
Time
Mathematica provides a flexible and consistent
high-level programming language that allows your firm
to focus on financial innovations rather than on
writing peripheral code.
- Increase the
Accuracy of Your Models
Mathematica combines the industry's most
advanced symbolic calculation engine,
arbitrary-precision numerics, and human-readable code
to ensure that you have the most accurate answers
possible.
- Deliver Your Models to Traders
and Decision-Makers
The unique MathLink
communication protocol allows complete flexibility
for model delivery--build your own notebook
interface, connect Mathematica to an existing
C++ application, or use a commercial application
such as Microsoft Excel. Other resources include J/Link
for Java connectivity, .NET/Link
to integrate with the Microsoft .NET framework,
and GUIKit
to construct your own graphical user interfaces.
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Decrease Your Development Time
Whether you are currently using Excel, C/C++, or another
traditional programming language, Wolfram Research can help
you to dramatically decrease your development time and
costs.
For Excel users, Mathematica offers an alternative to
the patchwork of custom-written macros and commercial add-ins
that are necessary to make spreadsheets a viable environment
for financial modeling. Mathematica Link
for Excel allows Mathematica's programming
language, computation kernel, and graphics engine to be
accessed from within your existing
spreadsheets. Because Mathematica contains
built-in
capabilities for an extraordinary range of calculations
and functions, it can already do many of the operations for
which you might otherwise need to write and debug complicated
macros. If the needed functions are not available, creating
new routines in Mathematica's intuitive high-level
language is much faster and easier than writing the same thing
with Excel's syntax.
Unlike C/C++, Mathematica takes care of the
programming infrastructure for you by providing high-level
constructs such as sorting, searching, file handling, and data
manipulation. This removes peripheral code from your routines
and allows Mathematica programs to be only 5-10% of the
size of those created in traditional languages or numerical
systems--greatly shrinking the time and cost associated with
developing new algorithms.
Increase the Accuracy of Your Models
There are several ways in which inaccuracies can creep into
a seemingly correct computer model. Mathematical errors made
prior to computer implementation, errors introduced during
computer implementation, inaccuracies brought about by
numerical approximation, and end-user errors caused by lack of
understanding of the computer model are all possible. Wolfram
Research can help you to minimize each of these categories by
integrating all of your modeling/analysis
into Mathematica.
Mathematica's symbolic calculation capabilities
utilize the industry-leading set of special functions and
algorithms, which allow you to derive your models analytically
without reverting to pen and paper. If numerical
approximations become necessary for mathematical
tractability, Mathematica's "smart numerics"
utilize arbitrary precision to give you the most accurate
calculations of any math software
available. Furthermore, Mathematica's logical and
consistent syntax, human-readable code, and convenient
notebook environment make it easy to write, modify, and
understand code--even if it was written by someone else.
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| Why an integrated
approach? |
| While other systems provide only a specific
functionality such as numeric calculations, symbolic
calculations, graphics, statistics, a programming
language, or typesetting and document
preparation, Mathematica integrates the
functionalities into one coherent environment. The
importance of this integration is illustrated by the
work of Dr. William Shaw, who has shown that common
indicators such as hedge parameters and implied
volatility can be adversely affected by the tools
that are used to calculate them.
For example, the common practice of using
numerical differencing to approximate hedge
parameters can introduce costly errors.
Mathematica's powerful symbolic calculus
capabilities make these approximations unnecessary
and obsolete. In the case of implied volatility, all
but the most basic options lead to values that are
nonunique solutions. This is a situation that is
quickly and easily discovered through graphical
analysis but is impossible to discover using
numerics exclusively.
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| A full discussion of the integrated approach
to derivatives modeling is included in William
Shaw's book Modelling Financial
Derivatives. Chapter 1 is available
online. |
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Deliver Your Models to Traders and Decision-Makers
While Mathematica can consolidate all of your
development work into a single, powerful environment, there
are a number of ways to distribute your Mathematica
models to those who need to utilize them. This is made
possible by Wolfram Research's communication protocol, called
MathLink, and flexible licensing arrangements that
support installation for a single machine, an enterprise-wide
network, or any point in between.
Some Distribution Options
Notebooks
Mathematica documents are platform-independent ASCII
files called notebooks. Notebooks provide structured outlines,
buttons, palettes, and hyperlinks to report text, graphics,
and calculations. Notebooks can be exported as TeX or HTML
documents or can even be pasted into an email and then sent to
another Mathematica user for editing.
Alternative Interfaces
Mathematica consists of the Mathematica kernel
and the Mathematica notebook interface, two pieces of
software that communicate via Wolfram Research's MathLink.
MathLink's application programming interface (API) also allows
Mathematica to be connected to external applications
written in C, C++, Fortran, Perl, Visual Basic, or commercial
applications. Thus, Mathematica's calculation
capabilities and programming language can be accessed from
interfaces created in Mathematica's notebook interface,
Microsoft Excel, or an environment such as Visual Basic or
C/C++.
A Closer Look at Some
of Mathematica's Features 
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