The Black Sholes Model and the Importance of Intuition

Black and Sholes argue that the value of an option contract can be determined by the cost of the strategy required to mimic it. They say identical assets must trade at the same price, even if they don't share the same name. In their model, there is continuous trading with no transactions costs or uniform tax rates. But in real life, prices are hardly uniform and can be especially tricky in financial products.