  The literature on volatility modelling and option pricing is a large and
diverse area due to its importance and applications. This paper provides a
review of the most significant volatility models and option pricing methods,
beginning with constant volatility models up to stochastic volatility. We also
survey less commonly known models e.g. hybrid models. We explain various
volatility types (e.g. realised and implied volatility) and discuss the
empirical properties.
