David Lindley cites the Black–Scholes model as a means of calculating and predicting stock-market variations (Nature 471, 255–256; 2011). But the model has its pitfalls.

For example, the US hedge-fund firm Long-Term Capital Management used this approach to direct its fund. The fund crashed in 1998 because the predictions diverged sharply from reality. The US government had to bail the firm out at a cost of about US$4 billion.