In the same way a rocket flight model is forecasting the arrangement of air molecules it’s about to run into. They’re instantaneous forecasts that are dynamically updated. No long-term forecasting involved.

At the end of the day, options market makers haven’t blown up since the early noughties. (LTCM got sunk by non-options bets.) They are low-margin, low-risk businesses. It’s fun to talk about them like they’re black boxes. And traders trying to defend their compensation will keep pitching them that way to senior management. But options pricing is a boring, largely solved—if still interesting—problem.