Before Black-Scholes gets bashed too hard, people should keep in mind that it's nearly 50 years old. Of course it's going to be outdated and inaccurate (as all models are).

It's worth reflecting on what options markets were like before Black-Scholes: a lot smaller and valued through qualitative, "over-the-counter" measures. More like handshake one-off business deals than liquid markets.

Regardless of how you feel about options trading or the role of liquidity in financial markets, Black-Scholes was an intellectual achievement and should be remembered as such, even as newer better techniques replace it.

To his credit, Ed Thorp also realized this at the same time as Black-Scholes but chose the money-management route and didn't feel the need to publish his strategies as papers for the academic community (and probably giving up the Nobel Prize in Economics).

My two favorite books on these people are Perry Mehrling's biography of Black and Ed Thorp's autobiography.

Fischer Black: https://www.amazon.com/Fischer-Black-Revolutionary-Idea-Fina...

Ed Thorp: https://www.amazon.com/Man-All-Markets-Street-Dealer/dp/0812...

Speaking of Fischer Black, while he worked quite a bit because he enjoyed it and was given a lot of flexibility due to his reputation, he took great pride in having the smallest percent ownership in Goldman Sachs out of any of the partners while he was there.

He was not a banker himself, and was known to play Super Mario Bros. in his office and spend his evenings at comedy clubs. And he had a bigger impact on finance than arguably any banker since JPMorgan, without working their hours.

Perry Mehrling wrote a great biography of Black which I can't recommend enough.

http://www.amazon.com/Fischer-Black-Revolutionary-Idea-Finan...

Check out "My Life as a Quant" by Emanuel Derman http://www.amazon.com/My-Life-Quant-Reflections-Physics/dp/0... and this book about Fischer Black's (of Black Scholes) work in finance. http://www.amazon.com/Fischer-Black-Revolutionary-Idea-Finan...