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Functional It\^o calculus was introduced in order to expand a functional $F(t, X\_{\cdot+t}, X\_t)$ depending on time $t$, past and present values of the process $X$. Another possibility to expand $F(t, X\_{\cdot+t}, X\_t)$ consists in…

Probability · Mathematics 2015-05-15 Andrea Cosso , Francesco Russo

Based on an extension of the martingale comparison method some comparison results for path-dependent functions of semimartingales are established. The proof makes essential use of the functional It\^o calculus. A main tool is an extension…

Probability · Mathematics 2019-08-28 Benedikt Köpfer , Ludger Rüschendorf

We develop a nonanticipative calculus for functionals of a continuous semimartingale, using an extension of the Ito formula to path-dependent functionals which possess certain directional derivatives. The construction is based on a pathwise…

Probability · Mathematics 2013-02-05 Rama Cont , David-Antoine Fournié

We develop the functional It\^o/path-dependent calculus with respect to fractional Brownian motion with Hurst parameter $H> \frac{1}{2}$. Firstly, two types of integrals are studied. The first type is Stratonovich integral, and the second…

Probability · Mathematics 2016-08-04 Jiaqiang Wen , Yufeng Shi

In this work, we establish pathwise functional It\^o formulas for non-smooth functionals of real-valued continuous semimartingales. Under finite $(p,q)$-variation regularity assumptions in the sense of two-dimensional Young integration…

Probability · Mathematics 2015-05-19 Alberto Ohashi , Evelina Shamarova , Nikolai N. Shamarov

We derive a functional change of variable formula for {\it non-anticipative} functionals defined on the space of right continuous paths with left limits. The functional is only required to possess certain directional derivatives, which may…

Probability · Mathematics 2010-04-09 Rama Cont , David-Antoine Fournie

We consider additive functionals as a time and space-dependent function of a diffusion corresponding to nonhomogeneous uniformly elliptic divergence form operator. We show that if the function belongs to natural domain of strong solutions…

Probability · Mathematics 2015-03-24 Tomasz Klimsiak

In this short note we use ideas from systems theory to define a functional calculus for infinitesimal generators of strongly continuous semigroups on a Hilbert space. Among others, we show how this leads to new proofs of (known) results in…

Functional Analysis · Mathematics 2016-09-29 Felix Schwenninger , Hans Zwart

We construct rich vector spaces of continuous functions with prescribed curved or linear pathwise quadratic variations. We also construct a class of functions whose quadratic variation may depend in a local and nonlinear way on the function…

Probability · Mathematics 2019-07-02 Yuliya Mishura , Alexander Schied

Motivated by questions arising in financial mathematics, Dupire introduced a notion of smoothness for functionals of paths (different from the usual Fr\'echet--Gat\'eaux derivatives) and arrived at a generalization of It\=o's formula…

Probability · Mathematics 2012-12-07 Harald Oberhauser

This paper considers the problem of constructing finite-dimensional state space realizations for stochastic processes that can be represented as the outputs of a certain type of a causal system driven by a continuous semimartingale input…

Optimization and Control · Mathematics 2024-02-16 Tanya Veeravalli , Maxim Raginsky

First, we revisit functional It\^o/path-dependent calculus started by B. Dupire, R. Cont and D.-A. Fourni\'e, using the formulation of calculus via regularization. Relations with the corresponding Banach space valued calculus introduced by…

Probability · Mathematics 2014-01-21 Andrea Cosso , Francesco Russo

Several versions of It\^{o}'s formula have been obtained in the context of the functional stochastic calculus. Here, we revisit this topic in two ways. First, by defining a notion of derivative along a functional, we extend the setting of…

Probability · Mathematics 2022-02-25 Christian Houdré , Jorge Víquez

We establish It\^o's formula along flows of probability measures associated with general semimartingales; this generalizes existing results for flows of measures on It\^o processes. Our approach is to first establish It\^o's formula for…

Probability · Mathematics 2022-09-20 Xin Guo , Huyên Pham , Xiaoli Wei

Dupire's functional It\^o calculus provides an alternative approach to the classical Malliavin calculus for the computation of sensitivities, also called Greeks, of path-dependent derivatives prices. In this paper, we introduce a measure of…

Computational Finance · Quantitative Finance 2018-06-20 Samy Jazaerli , Yuri F. Saporito

We construct a new topology on the space of stopped paths and introduce a calculus for causal functionals on generic domains of this space. We propose a generic approach to pathwise integration without any assumption on the variation index…

Probability · Mathematics 2022-08-23 Henry Chiu , Rama Cont

A peculiar feature of It\^o's calculus is that it is an integral calculus that gives no explicit derivative with a systematic differentiation theory counterpart, as in elementary calculus. So, can we define a pathwise stochastic derivative…

Probability · Mathematics 2010-05-25 Hassan Allouba

We prove a rough It\^o formula for path-dependent functionals of $\alpha$-H\"older continuous paths for $\alpha\in(0,1)$. Our approach combines the sewing lemma and a Taylor approximation in terms of path-dependent derivatives.

Probability · Mathematics 2025-07-14 Franziska Bielert

In this paper we study the relationship between functional forward-backward stochastic systems and path-dependent PDEs. In the framework of functional It\^o calculus, we introduce a path-dependent PDE and prove that its solution is uniquely…

Probability · Mathematics 2012-04-18 Shaolin Ji , Shuzhen Yang

This paper introduces the path derivatives, in the spirit of Dupire's functional It\^o calculus, for the controlled paths in the rough path theory with possibly non-geometric rough paths. The theory allows us to deal with rough integration…

Probability · Mathematics 2014-12-24 Christian Keller , Jianfeng Zhang
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