Fairmat Academic


Fairmat Academic is the free solution for students and academia which helps you to prototype and evaluate financial products and to evaluate projects.

Key Features:

  • High level of abstraction: Fairmat allows users with no knowledge of programming languages to develop a pricing routine for new derivative contracts from the ground up. Complex payoff structures, dependencies and optionalities are easily modeled in a modular and user-friendly visual environment. With Fairmat,  derivatives models are designed by looking at statistical properties and structure. Once the pricing model is created, the valuation procedure is automatically generated.

  • Algebraic language: The built-in scripting language for stochastic expressions permits complex payoffs to be described easily.

  • Multi-platform: Fairmat is currently available for Windows, Linux (Ubuntu, Open Suse among others), and Mac OsX.
  • Valuations: Various analyses can be performed on the derivatives models created, including mark-to-market valuations, mark-to-model valuations, sensitivity analyses/greeks, scenario (what- if) analyses, risk analyses, and historical risk measure calculations.

  • Model exchange: The information on the structure of each derivative contract model is contained in an xml file and can be modified by external programs and exchanged with third parties.

  • Plug-in system: Fairmat is fully extensible both by native scripting and by a plug-in system which allows users and developers to create additional features.

Modeling capabilities:

  • Currently, Fairmat provides the following built-in types of stochastic processes to model the value drivers: (Geometric) Brownian Motion, (Log-)Mean-Reverting (Ornstein-Uhlenbeck) process, Generic Ito process, Heston (stochastic volatility model), ARMA, Hull-White (term structure model) with one and two factors, Dai-Singleton (term structure model). Of course, this is just the beginning; 
  • Path-dependents contracts and complex payoff are easily modeled; 
  • Early exercise (callability) and other optimal policies can be priced; 
  • Real options valuation capabilities using network switching models with applications to energy, natural resources and pharma industries.

 Available Analysis:

  • Mark-to-market / mark-to-model
  • Sensitivity analysis of the value of the project to model parameters
  • Scenario (what-if) analysis
  • Risk analysis
  • Simulation under historical/actual probability 
  • Impact analysis
  • Optimal policy simulation analysis
  • Greeks 

Numerical capabilities:

  • Monte-Carlo simulation using a Boyle-style approach for European-style contracts and Least-Squares Monte Carlo approach for American-style contracts. 
  • Multivariate lattice approximations of the underlying dynamics.
  • Modular, portable, scalable, multi-threaded numerical engine.

 Type of problems modeled with ease:

  • Swaps: Interest rate swaps, Cross currency & interest rate swaps, Overnight indexed swaps, Domestic currency swaps, Forward rate agreements, Ratchet swaps, Sticky swaps, Constant Maturity swaps, Range Accrual swaps, Barrier swaps, Equity and Commodity swaps, Basket swaps, Amortizing swaps, Inflation swaps, Multileg swaps, Balanced IRS, Convertible swaps, Differential IRS, Protected directional IRS, Extra swaps, Stability swaps, Protected variable IRS…
  • Other Exotic options including Caps/Floors, Collars, Swaptions, Corridors, Quanto Options, Binary Options, Asian Options, Barrier Options, Basket Options, Straddle Options, Knock-out/in options, Ratchet Options, range accruals, Range stability callable, Double range stability, Cumulative spread options, Zeta floaters, evaluations of flexibility in operations, Callable sequences of options, evaluations of virtual power plants...

In this page you can read notes about Fairmat Academic releases: the current stable release is Fairmat Academic 1.7.0

Please note that discussions about the use of the software can be found in the user forums. User issues regarding Fairmat can be also reported here.

List of Fairmat Academic releases:


Fairmat Academic is supported for the following platforms:


Windows XP SP2 or later is required, and a minimum of  50 MB of free space (*1) and 512 MB of RAM are required.


Ubuntu 8.10 or later is required, and at least 50 MB of free space (*2) and 512 MB of RAM are required. OpenSuse 11.1 or later is required.

From April 2012 Fairmat Academic is also included in the Ubuntu app center.


OSX 10.5 or later is required, and at least 150 MB of free space and 1GB of RAM are required.



(*1) Additional  space is required if the .Net 4.0 framework is missing. If the .Net framework is missing, it will be installed automatically by the installer package. Alternatively it can be downloaded manually from the Microsoft website  here, and must be installed before installing Fairmat.

(*2) More space will be required if missing packages need to be installed. The required packages will be installed automatically.

How to Install Fairmat Academic

This section will guide you through the installation of Fairmat Academic. If you have any doubt or experience any problem do not hesitate to write us at info@fairmat.com. Note that you may have already performed some of the steps described in this section.

Step 1: Sign up on fairmat.com

Go to http://fairmat.com/signup, insert your data and valid email address, this email address will be used for sending you the credentials and sofware licenses.


Step 2: Download the software

Login using the credentials we sent you (If you do not find tem, chek in the spam folder) and go to the downlad section http://fairmat.com/download and down the version suitable for your PC. Fairmat is available for Windows, Linux and MacOSX.


For more information about system requirements, read here.

An email with a Fairmat Academic activation code will be sent to you and must be used later in the process.


Step 3: Install the software

Install on Windows

Double click on the installer package and you will be guided through the installation procedure.


Install on Mac OSX


For Mac OSX 10.5 and 10.6

Fairmat Academic needs te X11 package which is an optional component for you Mac OSX. If you are running Mac OSX 10.7, X11 is already installed and you can skip this step. In any case, Fairmat will prompt you a message is something is missing.

You can find X11 in you Mac OSX DVD. Open it and click on the optional installs folder.


Select optional install.pkg

Select Applications/X11 and follow instructions.


For Mac OSX 10.8

Download and install X11 from http://xquartz.macosforge.org

After the installation of pkg file re-boot the system.

Install Fairmat Academic

After having installed X11, Install Fairmat Academic in the usual way, just drag Fairmat on the Applications folder.


Install on Linux

  • For Linux Ubuntu and Debian based system, double click on the downloaded file and follow the instructions. Note that you must have administrative privileges in order to install the software. Alternatively open a terminal, locate the downloaded package, and write (for example) the following text:

               sudo gdebi fairmat-academic-0.9.1-131.deb [press enter]

Note that now fairmat academic is also available on the ubuntu software center

  • For Linux openSuse, locate the downloaded .rpm package, right click and select open with "Package Installer". Alternatively open a terminal and write (for example) the following text:

                sudo zypper install fairmat-academic-0.9.10-212.i386.rpm [press enter]


Step 4a: Activate the software

The first time you launch Fairmat, a dialog window, will require you to enter the activation code.

Enter the license code we sent you in the text box and press the Online Activation button which will appear when the activation code is correct.

Note that you can also find your license in the my downloads section of Fairmat.com.



Step 4b: Firewall settings

In the case you are behind a firewall whose settings are not standard, from the activation form you click the button [Internet Connection Settings] and specify manually the proxy server parameters as shown in the dialog window on the right.

Fairmat will save them on your pc and use when needed. You can modify them at any time in the Fairmat Preferences dialog


Step 5: Use Fairmat!

Now you are ready to use Fairmat! You can find a lot of learning material such as tutorials and videos


Step 6: Downloads the extensions you need

You can also find useful extensions on http://fairmat.com/plugins. They can be installed easily from the website or from the Settings->PLug-in Settings Dialog within the software. You may find for example useful the Binomial Lattice Solver.

Fairmat is a project based on 'fairness':


Fair effort needed to model financial projects

Fairmat allows the user to choose the best description of the dynamic evolution of the valuation drivers from a set of different models. Moreover, with Fairmat you can design any financial project using a graphic representation combined with a high level algebraic language. 

  • In order to price structures with conditional/compound payments, decisions that switch among different modes, or simply options that can be exercised ahead of their maturity, an optimal policy must be computed which usually requires case-specific coding. Fairmat's graphic/algebraic language enables users to save hours (and even days) of code writing and testing, so as to focus solely on the specific features of the financial project.

  • Complex payoffs occurring in exotic contracts or in the valuation of real options can be expressed easily with a flexible built-in algebraic language.


  • The dynamic stochastic model of the underlying factors can be chosen from a set of possible models. Models calibration is easy because Fairmat can be linked with most popular market data provider.

Fair outputs of the analysis

Fairmat calculates the fair value of a financial project using a range of numerical methods – from simple ones like binomial lattices, to more sophisticated approaches like Least-Squares Monte Carlo simulation. In addition to this, optimal execution policies, the distribution of future cash flows, and various risk assessments can be obtained as by-products of the valuation.

Fair access to the software

Fairmat is available in an academic version that can be downloaded and used on many different OS platforms free of charge. Anyone interested in studying or doing research on financial problems can use it. Moreover, if you would like to contribute to the development of the software, you can create open source implementations of new features as “plug-ins”. Only  commercial versions of the software requires the payment of a license fee.

Fair access to the information

Contracts and projects implemented with Fairmat can be easily assessed, checked and compared with other users and software programs. This is because the whole description of the contract can be saved within a single model-file.

Fair business model

We believe in open source software. No development team, whatever its size, can be as effective as an entire community of users/developers. However, one the limits of the standard open source business model is that frequently the value generated by the common effort made is retained by the original contributors, or – in the worst case – by free-riders who exploit the effort without paying back the community. We believe that, being a community effort, the value of the project must be shared with those who create it. We believe on the need to reward the time a community spends on improving on-line projects. While the software’s core is closed in order make sure that the project's outcomes are shared among creators and contributors, this project is owned by the community. For that reason, if outcomes are generated, they will be shared with the community through a revenue sharing agreement with developers/contributors. We believe that this approach is revolutionary, especially for financial software.

Fair organization

We are setting up a free repository where developers can upload and share open-source applications (“plug-ins”). We invite users to create and publish innovative contributions in any area of financial economics. This would permit other users to test and review the contributions. Every six months (see the road map) the best plug-ins (tested and organized) will be packed into an official open-source collection available free of charge. This process is driven by the community itself. Finally, let us hear your suggestions on how to improve all the aspects of this project, including revenue-sharing agreements and development aspects.


The Fairmat  team.


Fairmat Academic 1.4.0 Screenshots