The Volatility Surface examines why options are priced as they are and, starting from a powerful representation of implied volatility in terms of a weighted average of realized volatilities, explores the implications of various popular models for pricing. The first half of the book focuses on setting up the theoretical framework surrounding the discipline, while the later chapters are oriented towards practical applications. The book contains a detailed derivation of the Heston model and explanations of other popular models such as SVJ, SVJJ, SABR and CreditGrades. It discusses the characteristics of exotic options from the humble barrier option to the super exotic Napoleon. . . .