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Treball de fi de màster

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cc by-nc-nd (c) Estévez Lengua, Francisco, 2026
Si us plau utilitzeu sempre aquest identificador per citar o enllaçar aquest document: https://hdl.handle.net/2445/230669

Rough volatility: from empirical evidence to the Rbergomi model

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The Black–Scholes–Merton model assumes constant volatility, contradicting the implied volatility surface of equity markets. A key feature of this surface is the at-the-money skew, which empirically explodes as a power law $\Psi(\tau) \sim \tau^{-0.4}$ as the maturity $\tau \to 0$. Classical stochastic volatility models such as Heston and Bergomi cannot reproduce this: driven by Brownian motion, their short-maturity skew stays bounded. Following Gatheral, Jaisson and Rosenbaum, we show that modelling log-volatility as a fractional Brownian motion with Hurst exponent $H \approx 0.1$ resolves this, and we develop the rough Bergomi model, whose Volterra kernel $(t-s)^{H-1/2}$ generates the empirical scaling $\Psi(\tau) \sim \tau^{H-1/2}$. We add three numerical contributions: a replication of the Hurst estimation on eight equity indices, a Monte Carlo validation of the method, and a Bergomi vs. rBergomi simulation comparison.

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Treballs finals del Màster en Matemàtica Avançada, Facultat de Matemàtiques, Universitat de Barcelona: Any: 2026. Director: Josep Vives Santa Eulàlia

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ESTÉVEZ LENGUA, Francisco. Rough volatility: from empirical evidence to the Rbergomi model. [consulted: 26 of July of 2026]. Available at: https://hdl.handle.net/2445/230669

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