When Robert Merton invented the “Black-Scholes” formula back in the early 1970s, he never bothered to file a patent for the idea.

For though the formula – created by the Nobel-prize-winning economist and two other academics – enabled the highly profitable world of derivatives to explode, “it never occurred to [us] not to put the Black-Scholes formula into the public domain”, recalls the professor of finance at Harvard University, with an impish grin that belies his 62 years.