The Black-Scholes formula is not a secret.
If you don’t believe me, you can read the formula, the original paper, or a tutorial. You can even buy the t-shirt. (OK, I created that one to make a point). An algorithm to compute a price using the Black-Scholes formula is not even a secret. You can get implementations in many languages, and you can read papers about how to make them better. Because it’s not a secret, getting it right will not make you a better trader. Getting it wrong, however, may make you a lot worse. And poorer. Knowing how to use it appropriately (and keeping that knowledge secret) is how you make enough money to buy your own Caribbean island.
When I need to calculate partial derivatives on European options, I feel much better about entrusting that task to the open source QuantLIB library than using a closed source tool because I can assure myself of its correctness by looking at the code. More important, the phalanx of PhDs and C++ wizards that make up the QuantLIB community can attest to its correctness. The world of finance is starting to understand this proposition. Notably, the QuickFIX project and the newer QuickFIX/J project have been successful in providing high-quality implementations of the widely-used FIX protocol. Noting those successes, we believe the open source model has much more to offer.
For these and many other reasons, we here at Marketcetera are building out open-source infrastructure for the finance and trading industries, providing open implementations of the non-secret algorithms and features, allowing you to focus on the secret pieces that drive your business. We will use this space to keep you posted on our progress and on the growing role of open-source software in finance.