--- title: "Meaning & Key Takeaway of: If each of your time steps is one week…" description: "\"If each of your time steps is one week long, you are not modeling the stock price terribly well over a one-week time period, because you are saying tha..." image: "https://sms4smile.com/quotes/i/539/john-hull-28186_because_if-each-of-your-time-steps-is-one-week-l_2205479.jpg" --- # If each of your time steps is one week long, you are not… ![“If each of your time steps is one week long, you are not modeling the stock price terribly well over a one-week time period, because you are saying that there are only two possible outcomes.” quote by John Hull](https://sms4smile.com/quotes/i/539/john-hull-28186_because_if-each-of-your-time-steps-is-one-week-l_2205479.jpg) [Download](https://sms4smile.com/quotes/i/539/john-hull-28186_because_if-each-of-your-time-steps-is-one-week-l_2205479.jpg) [Open image](https://sms4smile.com/quotes/i/539/john-hull-28186_because_if-each-of-your-time-steps-is-one-week-l_2205479.jpg) > “If each of your time steps is one week long, you are not modeling the stock price terribly well over a one-week time period, because you are saying that there are only two possible outcomes.” [John Hull](https://sms4smile.com/quotes/author/john-hull/) ## About This Quote This interpretation was drafted with AI assistance. It is one reading of the quote, not the author's own explanation. Modeling stock prices with weekly steps oversimplifies outcomes, allowing only two possibilities per week. **In simple terms:** Weekly modeling is too simplistic. Key Takeaway Use finer time steps for realistic modeling. Themes finance modeling precision Mood analytical cautious Type technical educational When to use this quote - trading strategies - financial forecasting - risk management - academic teaching Key Concepts stochastic processes risk assessment Questions to Reflect On - How might daily steps improve price predictions? - What trade-offs exist between model simplicity and accuracy? A Different Perspective More granular models increase complexity and data needs. ★ ★ ★ ★ ★ No ratings yet [Customer](https://sms4smile.com/quotes/about/customer/) [Investing](https://sms4smile.com/quotes/about/investing/) [Stock price](https://sms4smile.com/quotes/about/stock-price/) [Time](https://sms4smile.com/quotes/about/time/) [Time period](https://sms4smile.com/quotes/about/time-period/) [Week](https://sms4smile.com/quotes/about/week/) ## Related quotes > [“I listen to Alicia practice a speech for class, and I don’t look at the clock even once. In fact, for the next week,…](https://sms4smile.com/quotes/nate-leboutillier/i-listen-to-alicia-practice-a-speech-for-class-and-i-don-t-look-at/) Nate LeBoutillier > [I have to paint at least two times a week, and there's not enough time in the day to do everything.](https://sms4smile.com/quotes/mary-lynn-rajskub/i-have-to-paint-at-least-two-times-a-week-and-there-s-not-enough-time/) [Mary Lynn Rajskub](https://sms4smile.com/quotes/author/mary-lynn-rajskub/) > [When you are shooting a movie in a week, there's not much time to travel.](https://sms4smile.com/quotes/mariette-hartley/when-you-are-shooting-a-movie-in-a-week-there-s-not-much-time-to/) [Mariette Hartley](https://sms4smile.com/quotes/author/mariette-hartley/) > [There are 168 hours in a week, and even if you're working out two, three, four, or five times a week for an hour,…](https://sms4smile.com/quotes/harley-pasternak/there-are-168-hours-in-a-week-and-even-if-you-re-working-out-two/) [Harley Pasternak](https://sms4smile.com/quotes/author/harley-pasternak/) > [“You will be betrayed this week, time and time again, by your own ch'i.”](https://sms4smile.com/quotes/the-onion/you-will-be-betrayed-this-week-time-and-time-again-by-your-own-ch-i/) [The Onion](https://sms4smile.com/quotes/author/the-onion/) > [ \[My parents\] worked hard all week long, and the way they celebrated and rejoiced in life was by making music on weekends. And that… ](https://sms4smile.com/quotes/rodney-crowell/my-parents-worked-hard-all-week-long-and-the-way-they-celebrated-and/) [Rodney Crowell](https://sms4smile.com/quotes/author/rodney-crowell/) > [In politics a week is a very long time.](https://sms4smile.com/quotes/harold-wilson/in-politics-a-week-is-a-very-long-time/) [Harold Wilson](https://sms4smile.com/quotes/author/harold-wilson/) > [“The 40-hour work week, long considered the gold standard, has quietly and insidiously stretched into 50 to 60 hours. Despite this accepted practice, social…](https://sms4smile.com/quotes/rosalind-joffe/the-40-hour-work-week-long-considered-the-gold-standard-has-quietly/) Rosalind Joffe > [A week is a long time in politics.](https://sms4smile.com/quotes/harold-wilson/a-week-is-a-long-time-in-politics/) [Harold Wilson](https://sms4smile.com/quotes/author/harold-wilson/) > [What sweeter words can fall on the human ear? It's going to be May all week long.](https://sms4smile.com/quotes/russell-baker/what-sweeter-words-can-fall-on-the-human-ear-it-s-going-to-be-may-all/) [Russell Baker](https://sms4smile.com/quotes/author/russell-baker/) > [I keep sour grapes in the fridge all the time. And I eat those all day long, all week long, all month. All the…](https://sms4smile.com/quotes/dale-earnhardt-jr/i-keep-sour-grapes-in-the-fridge-all-the-time-and-i-eat-those-all-day/) [Dale Earnhardt Jr](https://sms4smile.com/quotes/author/dale-earnhardt-jr/) > [We're with each other 24 hours a day. We film all week long. On weekends, we go on these tours. If we didn't have…](https://sms4smile.com/quotes/sal-vulcano/we-re-with-each-other-24-hours-a-day-we-film-all-week-long-on/) [Sal Vulcano](https://sms4smile.com/quotes/author/sal-vulcano/) > [I've only been gone a week," I reminded him. Well, a week's a long time. It's seven days. Which is one hundred and sixty-eight…](https://sms4smile.com/quotes/meg-cabot/i-ve-only-been-gone-a-week-i-reminded-him-well-a-week-s-a-long-time/) [Meg Cabot](https://sms4smile.com/quotes/author/meg-cabot/) > [I don't look like I've been on a week long crack binge with Amy Winehouse.](https://sms4smile.com/quotes/triple-h/i-don-t-look-like-i-ve-been-on-a-week-long-crack-binge-with-amy/) [Triple H](https://sms4smile.com/quotes/author/triple-h/) > [Christopher Walken could literally read a phone book and fill a theater, and it would be interesting to watch. I've often wanted to produce…](https://sms4smile.com/quotes/gary-cole/christopher-walken-could-literally-read-a-phone-book-and-fill-a/) [Gary Cole](https://sms4smile.com/quotes/author/gary-cole/) ## More by John Hull > [The HoLee model was the first term structure model. I remember reading their paper soon after it was published and as it was fairly…](https://sms4smile.com/quotes/john-hull/the-holee-model-was-the-first-term-structure-model-i-remember-reading/) [John Hull](https://sms4smile.com/quotes/author/john-hull/) > [Alan White and I spent the next two or three years working together on this. We developed what is known a stochastic volatility model.…](https://sms4smile.com/quotes/john-hull/alan-white-and-i-spent-the-next-two-or-three-years-working-together/) [John Hull](https://sms4smile.com/quotes/author/john-hull/) > [I didn't become interested in derivatives until 1982, 1983.](https://sms4smile.com/quotes/john-hull/i-didn-t-become-interested-in-derivatives-until-1982-1983/) [John Hull](https://sms4smile.com/quotes/author/john-hull/) > [I guess any simple idea that is really good will catch on quickly.](https://sms4smile.com/quotes/john-hull/i-guess-any-simple-idea-that-is-really-good-will-catch-on-quickly/) [John Hull](https://sms4smile.com/quotes/author/john-hull/) > [Briefly speaking, our conclusion is that stochastic volatility does not make a huge difference as far as the pricing is concerned if you get…](https://sms4smile.com/quotes/john-hull/briefly-speaking-our-conclusion-is-that-stochastic-volatility-does/) [John Hull](https://sms4smile.com/quotes/author/john-hull/) > [Our starting point then was trying to find a way to incorporate mean reversion into the HoLee model.](https://sms4smile.com/quotes/john-hull/our-starting-point-then-was-trying-to-find-a-way-to-incorporate-mean/) [John Hull](https://sms4smile.com/quotes/author/john-hull/) > [We concluded that you cannot rely on delta hedging alone. It sounds simplistic to say that now, but back then, this was the sort…](https://sms4smile.com/quotes/john-hull/we-concluded-that-you-cannot-rely-on-delta-hedging-alone-it-sounds/) [John Hull](https://sms4smile.com/quotes/author/john-hull/) > [We started giving presentations at practitioner conferences in 1986, and since then all of our derivatives research has been stimulated by contact with practitioners.](https://sms4smile.com/quotes/john-hull/we-started-giving-presentations-at-practitioner-conferences-in-1986/) [John Hull](https://sms4smile.com/quotes/author/john-hull/) > [Our research led on to other things, such as the fact that exchange rates are not lognormally distributed.](https://sms4smile.com/quotes/john-hull/our-research-led-on-to-other-things-such-as-the-fact-that-exchange/) [John Hull](https://sms4smile.com/quotes/author/john-hull/) > [There are challenges in terms of the measurement of VAR for what are known as nonlinear derivatives, where things like gamma and vega are…](https://sms4smile.com/quotes/john-hull/there-are-challenges-in-terms-of-the-measurement-of-var-for-what-are/) [John Hull](https://sms4smile.com/quotes/author/john-hull/) > [Yes, our tree has an interesting shape. The center branches reflect the shape of the zero curve. When extreme parts of the tree are…](https://sms4smile.com/quotes/john-hull/yes-our-tree-has-an-interesting-shape-the-center-branches-reflect-the/) [John Hull](https://sms4smile.com/quotes/author/john-hull/) > [The real challenge was to model all the interest rates simultaneously, so you could value something that depended not only on the three-month interest…](https://sms4smile.com/quotes/john-hull/the-real-challenge-was-to-model-all-the-interest-rates-simultaneously/) [John Hull](https://sms4smile.com/quotes/author/john-hull/) > [I think VAR is a very healthy development within the industry.](https://sms4smile.com/quotes/john-hull/i-think-var-is-a-very-healthy-development-within-the-industry/) [John Hull](https://sms4smile.com/quotes/author/john-hull/) > [In the interest rate area, traders have for a long time used a version of what is known as Black's model for European bond…](https://sms4smile.com/quotes/john-hull/in-the-interest-rate-area-traders-have-for-a-long-time-used-a-version/) [John Hull](https://sms4smile.com/quotes/author/john-hull/) > [The problem with interest rates are that you are not modeling a single number, you are modeling a whole term structure, so it is…](https://sms4smile.com/quotes/john-hull/the-problem-with-interest-rates-are-that-you-are-not-modeling-a/) [John Hull](https://sms4smile.com/quotes/author/john-hull/) [Explore all 19 John Hull quotes ](https://sms4smile.com/quotes/author/john-hull/) ## More Because quotes > [One is a painter because one wants so-called freedom; one doesn't want to go to the office every morning.](https://sms4smile.com/quotes/marcel-duchamp/one-is-a-painter-because-one-wants-so-called-freedom-one-doesn-t-want/) [Marcel Duchamp](https://sms4smile.com/quotes/author/marcel-duchamp/) > [I gave my archive to Emory University because there's a really dear friend who teaches there, Rudolph Byrd, and he's the editor.](https://sms4smile.com/quotes/alice-walker/i-gave-my-archive-to-emory-university-because-there-s-a-really-dear/) [Alice Walker](https://sms4smile.com/quotes/author/alice-walker/) > [Because of the womb being a central phenomenon in the feminine body, the whole psychology of woman differs: she is non-aggressive, non-inquiring, non-questioning, non-doubting,…](https://sms4smile.com/quotes/rajneesh/because-of-the-womb-being-a-central-phenomenon-in-the-feminine-body/) [Rajneesh](https://sms4smile.com/quotes/author/rajneesh/) > [I love casting against type and doing things you wouldn't expect, because I think you get more interesting performances that way. Hollywood loves to…](https://sms4smile.com/quotes/david-s-goyer/i-love-casting-against-type-and-doing-things-you-wouldn-t-expect/) [David S. Goyer](https://sms4smile.com/quotes/author/david-s-goyer/) > [There were songs that we cut out after we chose the name, because 'Praise Break' turned out to be an underlying concept that I…](https://sms4smile.com/quotes/daniel-caesar/there-were-songs-that-we-cut-out-after-we-chose-the-name-because/) [Daniel Caesar](https://sms4smile.com/quotes/author/daniel-caesar/) > [It took me 20 years to buy an electric typewriter, because I was afraid it would be too sensitive. I like to bang the…](https://sms4smile.com/quotes/elmore-leonard/it-took-me-20-years-to-buy-an-electric-typewriter-because-i-was/) [Elmore Leonard](https://sms4smile.com/quotes/author/elmore-leonard/) > [I was also known as Frodo because I was an early adopter of 'The Lord of the Rings.](https://sms4smile.com/quotes/tom-perrotta/i-was-also-known-as-frodo-because-i-was-an-early-adopter-of-the-lord/) [Tom Perrotta](https://sms4smile.com/quotes/author/tom-perrotta/) > [I believe in taxation and health care that is outside the usual libertarian mandate, because I don't want people to have to suffer. It's…](https://sms4smile.com/quotes/neil-peart/i-believe-in-taxation-and-health-care-that-is-outside-the-usual/) [Neil Peart](https://sms4smile.com/quotes/author/neil-peart/) > [It's like saying French shouldn't be taught because you don't understand it because it's new. Shakespeare is just like learning a new, exciting language.](https://sms4smile.com/quotes/samuel-barnett/it-s-like-saying-french-shouldn-t-be-taught-because-you-don-t/) [Samuel Barnett](https://sms4smile.com/quotes/author/samuel-barnett/) > [Whether it was Little League or playing with your brothers or sisters, that was always a problem. If I would lose - because I…](https://sms4smile.com/quotes/cal-ripken-jr/whether-it-was-little-league-or-playing-with-your-brothers-or-sisters/) [Cal Ripken, Jr](https://sms4smile.com/quotes/author/cal-ripken-jr/) > [Sometimes, when full and in fear that I will continue to eat unwanted food just because it's staring at me, I will place my…](https://sms4smile.com/quotes/rachel-nichols/sometimes-when-full-and-in-fear-that-i-will-continue-to-eat-unwanted/) [Rachel Nichols](https://sms4smile.com/quotes/author/rachel-nichols/) > [I didn't want to do 'Fashion Police' because I thought, 'This is stupid, this is beneath me, who wants to talk about fashion?' It…](https://sms4smile.com/quotes/joan-rivers/i-didn-t-want-to-do-fashion-police-because-i-thought-this-is-stupid/) [Joan Rivers](https://sms4smile.com/quotes/author/joan-rivers/) > [I was contacted by Rajyavardhan Singh Rathore, MP, through the Pune Film Institute and offered the post in the NFDC. I accepted it for…](https://sms4smile.com/quotes/suresh-gopi/i-was-contacted-by-rajyavardhan-singh-rathore-mp-through-the-pune/) [Suresh Gopi](https://sms4smile.com/quotes/author/suresh-gopi/) > [I have always been a big meta guy because I think the way journalism is practiced in Washington, and the way everyone sort of…](https://sms4smile.com/quotes/mark-leibovich/i-have-always-been-a-big-meta-guy-because-i-think-the-way-journalism/) [Mark Leibovich](https://sms4smile.com/quotes/author/mark-leibovich/) > [There are a lot of kids out there copying and distributing movies - not because they care about seeing the movies or sharing them…](https://sms4smile.com/quotes/john-perry-barlow/there-are-a-lot-of-kids-out-there-copying-and-distributing-movies-not/) [John Perry Barlow](https://sms4smile.com/quotes/author/john-perry-barlow/) Browse all 15,485 Because quotes ```json { "@context": "https://schema.org", "@graph": [ { "@type": "Quotation", "text": "If each of your time steps is one week long, you are not modeling the stock price terribly well over a one-week time period, because you are saying that there are only two possible outcomes.", "creator": { "@type": "Person", "name": "John Hull" }, "isPartOf": { "@id": "https://sms4smile.com/quotes/#website" }, "url": "https://sms4smile.com/quotes/john-hull/if-each-of-your-time-steps-is-one-week-long-you-are-not-modeling-the/", "about": { "@type": "Thing", "name": "Because" }, "@id": "https://sms4smile.com/quotes/john-hull/if-each-of-your-time-steps-is-one-week-long-you-are-not-modeling-the/#quotation", "image": { "@type": "ImageObject", "@id": "https://sms4smile.com/quotes/i/539/john-hull-28186_because_if-each-of-your-time-steps-is-one-week-l_2205479.jpg", "contentUrl": "https://sms4smile.com/quotes/i/539/john-hull-28186_because_if-each-of-your-time-steps-is-one-week-l_2205479.jpg", "url": "https://sms4smile.com/quotes/i/539/john-hull-28186_because_if-each-of-your-time-steps-is-one-week-l_2205479.jpg", "width": 1080, "height": 1080, "caption": "“If each of your time steps is one week long, you are not modeling the stock price terribly well over a…” — John Hull", "creditText": "SMS4Smile Quotes", "creator": { "@id": "https://sms4smile.com/quotes/#organization" } } }, { "@type": "BreadcrumbList", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://sms4smile.com/" }, { "@type": "ListItem", "position": 2, "name": "Quotes", "item": "https://sms4smile.com/quotes/" }, { "@type": "ListItem", "position": 3, "name": "John Hull", "item": "https://sms4smile.com/quotes/author/john-hull/" }, { "@type": "ListItem", "position": 4, "name": "If each of your time steps...", "item": "https://sms4smile.com/quotes/john-hull/if-each-of-your-time-steps-is-one-week-long-you-are-not-modeling-the/" } ], "@id": "https://sms4smile.com/quotes/john-hull/if-each-of-your-time-steps-is-one-week-long-you-are-not-modeling-the/#breadcrumb" }, { "@type": "WebSite", "@id": "https://sms4smile.com/quotes/#website", "name": "SMS4Smile Quotes", "url": "https://sms4smile.com/quotes/", "publisher": { "@id": "https://sms4smile.com/quotes/#organization" } }, { "@type": "Organization", "@id": "https://sms4smile.com/quotes/#organization", "name": "SMS4Smile Quotes", "url": "https://sms4smile.com/quotes/", "logo": { "@type": "ImageObject", "url": "https://sms4smile.com/quotes/wp-content/themes/sq/assets/icons/icon-512.png", "width": 512, "height": 512 } } ] } ```