The Money Formula - Dodgy Finance, Pseudo Science, and How Mathematicians Took Over the Markets

Aug 7, 2026

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A finance-focused analysis of how misleading ideas and overstated mathematical claims shaped modern markets. Explores early models and the shift toward randomness, then evaluates risk management methods such as value-at-risk, hedging, and quantitative analysis. Traces the rise of quants, regulators, and trading technology, highlighting model risk, calibration failures, and systemic threats. Concludes with practical guidance to simplify markets and better align quantitative methods with reality.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages299

Reading Time12 h 33 min

AccessFree to download

Contents

Acknowledgements

About the Authors

Introduction

Notes

Chapter 1 Early Models

Chapter 2 Going Random

Chapter 3 Risk Management

Chapter 4 Market Makers

Chapter 5 Deriving Derivatives

Chapter 6 What Quants Do

Chapter 7 The Rewrite

Chapter 8 No Laws, Only Toys

Chapter 9 How to Abuse the System

Chapter 10 Systemic Threat

Epilogue: Keep it Simple

Bibliography

Index

The Money Formula DODGY FINANCE, PSEUDO SCIENCE, AND HOW MATHEMATICIANS TOOK OVER THE MARKETS Paul Wilmott David Orrell [OceanofPDF.com](OceanofPDF.com) This edition first published 2017 © 2017 Paul Wilmott and David Orrell Registered office John Wiley & Sons Ltd, The Atrium, Southern Gate, Chichester, West Sussex, PO19 8SQ, United Kingdom For details of our global editorial offices, for customer services and for information about how to apply for permission to reuse the copyright material in this book please see our website at [www.wiley.com](www.wiley.com). All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, except as permitted by the UK Copyright, Designs and Patents Act 1988, without the prior permission of the publisher. Wiley publishes in a variety of print and electronic formats and by print-on-demand. Some material included with standard print versions of this book may not be included in e-books or in print-ondemand. If this book refers to media such as a CD or DVD that is not included in the version you purchased, you may download this material at [http://booksupport.wiley.com](http://booksupport.wiley.com. For more)[. For more](http://booksupport.wiley.com. For more) information about Wiley products, [visit](visit www.wiley.com)[ ](visit www.wiley.com)[www.wiley.com](visit www.wiley.com). Designations used by companies to distinguish their products are often claimed as trademarks. All brand names and product names used in this book are trade names, service marks, trademarks or registered trademarks of their respective owners. The publisher is not associated with any product or vendor mentioned in this book. Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. It is sold on the understanding that the publisher isnot engaged in rendering professional services and neither the publisher nor the author shall be liable for damages arising herefrom. If professional advice or other expert assistance is required, the services of a competent professional should be sought. Library of Congress Cataloging-in-Publication Data Names: Wilmott, Paul, author. | Orrell, David, author. Title: The money formula : dodgy finance, pseudo science, and how mathematicians took over the markets / Paul Wilmott, David Orrell. Description: Hoboken : Wiley, 2017. | Includes bibliographical references and index. Identifiers: LCCN 2016053256| ISBN 9781119358619 (paperback) | ISBN 9781119358664 (Adobe PDF) | ISBN 9781119358688 (ePub) Subjects: LCSH: Finance Mathematical models. | BISAC: BUSINESS & ECONOMICS / Finance. Classification: LCC HG106 .W555 2017 | DDC 332.64–dc23 LC record available at [https://lccn.loc.gov/2016053256](https://lccn.loc.gov/2016053256) A catalogue record for this book is available from the British Library. ISBN 978-1-119-35861-9 (paperback) ISBN 978-1-119-35866-4 (ebk) ISBN 978-1-119-35868-8 (ebk) ISBN 978-1-119-35872-5 (ebk) Cover design concept: Beatriz Leon [OceanofPDF.com](OceanofPDF.com) To Oscar, Zachary, Genevieve, and Horatio —Paul Wilmott To Wendy and Katherine —David Orrell [OceanofPDF.com](OceanofPDF.com) CONTENTS Acknowledgements About the Authors Introduction Notes Chapter 1 Early Models Monetary Alchemy Gold Standard The Systems of Nature Rational Mechanics Finding Equilibrium Intrinsic Value Notes Chapter 2 Going Random Theory of Speculation Efficient Markets Irrational Markets Not Normal Mental Virus Notes Chapter 3 Risk Management Fundamentals Beauty Contest Technical Analy

FAQs

What topics does the book cover across its ten chapters?

It moves from early monetary and equilibrium models to random speculation, then to risk management, options, derivatives, and the work of quants. Later chapters address model risk, confusion sources, market abuse exercises, and systemic threats.

How does the book explain the role of quants in financial markets?

It contrasts quant methods with regulation and oversight, discussing how scientific claims and algorithmic approaches can mislead. The book emphasizes issues like blinding us with science, bots, and creative finance as drivers of market behavior.

What does the epilogue recommend readers to do?

It stresses keeping finance simple, alongside aligning stakeholders—quants, regulators, economists, banks, traders, journalists, educators, and politicians—with clearer, more reliable approaches.

Aug 7, 2026

Upload by Riley