We present a model, based on Heston's
approach, for the evaluation of European options under stochastic
volatility. Similarly to Heston's, our model is flexible enough to
reproduce a wide range of pricing effects that lack in the Black and
Scholes setting. The reason of our choice lays in the fact that
Heston's continuous-time dynamics do not have a discrete-time
counterpart that can be easily managed in pricing non standard
derivatives when using binomial or trinomial trees.
