The purpose of this edition is to furnish advanced students of Latin literature with assistance in reading and interpreting book 3 of Cicero's De oratore. To this end I have sought to provide an accurate and readable text as well as what seems necessary information about its syntax, usage, and style, its historical, literary, and philosophical background, and the subtle and often unexpected progression of its thought and argument.

In attempting to discharge this task I owe much, even when, for reasons of space, the debt is not explicitly acknowledged, to earlier commentaries, including those of Ernesti, Ellendt, Sorof, and Wilkins, to more recent scholarly research, especially that of E. Fantham, to the exemplary translation and guide to De or. by J. May and J. Wisse (= M–W), and, above all, to the first four volumes of the great Kommentar of A. D. Leeman and his associates (= Komm.); the fifth volume, by Wisse, M. Winterbottom, and Fantham, which covers most of book 3, did not, unfortunately, become available until my own commentary was complete, too late to be consulted without further delaying an already much-delayed project. Other works that have been of use are listed in the References, but this does not pretend to be an exhaustive bibliography, and in general citations of secondary material are limited to recent works in English which can in turn direct readers to earlier scholarship.

CICERO'S PROEM: THE FATES OF THE CHARACTERS IN THE DIALOGUE

The book begins on a sombre note, with Cic. looking past the end of the dialogue to the death of Cra. just a few days later (1n.) and to the calamities which would overtake the other participants, their friends, and even their enemies in the years to come. It is striking that in his initial account of the dialogue's setting (1.24–9) Cic. did not mention any of this, and although some of his readers would have recalled the events without prompting, his cataloguing of them here seems meant to add a special poignancy to some, at least, of Cra.'s speech and especially to the remarks of the soon-to-be renegade Sulp. (147n.).

1 Instituentimihi … renouauit: a peculiarily Ciceronian construction, in which a clause is bracketed by the dat. part. of a verb of ‘thinking’ at or near the start, then a finite verb of ‘getting an idea’ at or near the end (Laughton 1964: 37–8; cf. 13, 1.1, 6, 2.128). Quinte frater: Q. Tullius Cicero, the addressee (1.1, 2.1) and ‘instigator’ (cf. 13 below, 1.4–5, 2.10–11) of De or. He was in Italy during the time of its composition (55), in between serving as legate for Pompey in Sardinia (56), then for Caesar in Gaul (54–52). sermonem … disputationem: when mentioned together, sermo tends to indicate ‘speech in general’, disputatio more specific ‘argumentation’ (22, 107, 211, 2.16, 19–21, ThLL 1440), and Cic.

In De or. and elsewhere the term loci (= Gk topoi (16n.)) is used of several different types of ‘argument/lines of argument’. The first usage (type a) is from technical rhetoric, and refers to standard, ‘ready-made’ arguments linked to various areas of knowledge, categories of status (70n.), and ‘means of persuasion’ (23n.) which could be found listed in handbooks. Because they are not tied to a particular case (e.g. the Lindbergh kidnapping) but can be applied to any case of a given type (first degree kidnapping) or, when they serve the ‘ethical’ or ‘pathetic’ functions, to more than one type of case (any involving a helpless victim), they are sometimes called loci communes (106n.).

Antonius, whose task is to explain the ‘discovery’ (inuentio) of arguments, has little use for this first type of loci (cf. 2.117, 130, 133), and offers instead something quite different. His loci (type b) are ‘abstract argument patterns which help an orator to devise all his arguments himself’ (M–W 34) whatever the subject matter, issue, or purpose at hand (e.g. the locus ‘from dissimilarity’ (2.169) as the ‘source’ for an argument concerning the inhumanity of Hauptmann, the Lindbergh kidnapper). As Catulus recognizes (2.152), what Antonius expounds is a version of the so-called ‘topical method’ of Aristotle (Top., Rhet.), who likewise distinguishes between ‘ready-made arguments’ and ‘abstract argument patterns’. He calls the former idia, eide, or idiai protaseis (‘specifics’, ‘species’, ‘specific materials’; see Rhet. 1.2.21–2, 4.1–13.7, 2.1.9) if they are tied to the individual genres of oratory, or, if they are ‘common‘ to all of the genres, koina (= communia) eide (Rhet. 2.18.2–19, 27, 22.1–12; cf. 1.3.7–9, 7.1–41, 9.35–41, 14.1–7, 2.1.1–11.7).

[1] Instituenti mihi, Quinte frater, eum sermonem referre et mandare huic tertio libro quem post Antoni disputationem Crassus habuisset, acerba sane recordatio ueterem animi curam molestiamque renouauit. nam illud immortalitate dignum ingenium, illa humanitas, illa uirtus L. Crassi morte exstincta subita est uix diebus decem post eum diem qui hoc et superiore libro continetur. nam ut Romam rediit extremo ludorum scaenicorum die, uehementer commotus oratione ea quae ferebatur habita esse in contione a Philippo, quem dixisse constabat uidendum sibi esse aliud consilium; illo senatu se rem publicam gerere non posse, mane Idibus Septembribus et ille et senatus frequens uocatu Drusi in curiam uenit. ibi cum Drusus multa de Philippo questus esset, rettulit ad senatum de illo ipso, quod in eum ordinem consul tam grauiter in contione esset inuectus. hic, ut saepe inter homines sapientissimos constare uidi, quamquam hoc Crasso, cum aliquid accuratius dixisset, semper fere contigisset, ut numquam dixisse melius putaretur, tamen omnium consensu sic esse tum iudicatum ceteros a Crasso semper omnes, illo autem die etiam ipsum a se superatum. deplorauit enim casum atque orbitatem senatus, cuius ordinis a consule, qui quasi parens bonus aut tutor fidelis esse deberet, tamquam ab aliquo nefario praedone diriperetur patrimonium dignitatis; neque uero esse mirandum, si, cum suis consiliis rem publicam profligasset, consilium senatus a re publica repudiaret. hic cum homini et uehementi et diserto et in primis forti ad resistendum Philippo quasi quasdam uerborum faces admouisset, non tulit ille et grauiter exarsit pignoribusque ablatis Crassum instituit coercere.

CRASSUS' EDICT CONCERNING THE ‘LATIN RHETORS’ (93N.)

Suet. DGR 25.2 (text of Kaster) Cn. Domitius Ahenobarbus et L. Licinius

Crassus censores ita edixerunt:

CICERO AND DE ORATORE

Circumstances of composition

Between 63, the year of his consulate and his widely supported and acclaimed suppression of Catiline's conspiracy, and 55, when he wrote De or., Cicero experienced, among other reversals, estrangement from the most powerful men in Rome, Pompey, Crassus, and Caesar, whom he declined to abet in their ‘triumvirate’ aimed at dominating the state, and increasing resentment in other quarters, fomented by his arch enemy P. Clodius, for what had come to be regarded as the unlawful execution of some of Catiline's followers. The estrangement and the resentment culminated in his exile from Italy for over a year (58–57) and, despite a triumphant return (Sept. 57) suggesting better times ahead, his hopes of renewed prominence were cut off by warnings from the ‘triumvirs’, who reaffirmed their alliance in the infamous conference at Luca (May 56), and by his disgust and disillusionment with the senate in general, which he came to regard as no less harmful to the state than the ‘triumvirate’ itself.

In these circumstances Cic. turned to the solacia (cf. 14) furnished by literary composition, first (57–55) with poems about Marius (= frr. 15–19 FLP; cf. 8n.) and about his own exile and return (= fr. 14 FLP), later with the philosophical treatises Rep. (54–51) and Leg. (begun in 52). In between – figuratively, perhaps (cf. 27, 56nn.), as well as actually – the poetry and the philosophy came De or., which he completed after considerable care and effort in Nov. of 55.

1–16 Cicero's proem: the fates of the characters in the dialogue.

17–18 Cotta's story: gathering to hear Crassus.

19–24 Crassus' discourse: the impossibility of separating style from subject matter.

25–36 Preliminaries to ornatus: the variety of eloquence.

37–51 The ‘necessary’ virtues of style: Latinity (purity) and clarity.

52–5 The other virtues of style: ornatus and appropriateness.

56–9 Oratory and philosophy: unity and ‘schism’.

60–8 The ‘schism’ and the history of philosophy.

69–73 Oratory without philosophy.

74–81 Philosophy and the ‘ideal orator’.

82–90 Philosophy and the actual orator.

91–5 Rhetorical teaching without philosophy: Latin rhetores.

96–103 A theory of ornatus.

104–8ornatus, amplification, and philosophy.

109–19 A method of philosophical inquiry: hypothesis and thesis.

120–5 Philosophy and ornatus.

126–31 Catulus on the Sophists.

132–43 The ‘schism’ and the earlier unity: Crassus' conclusion.

144–7 The reaction to Crassus' discourse.

148–54 The technicalities of ornatus: individual words.

155–65 Metaphor.

166–70 Devices related to metaphor.

171–2 Words in combination: juxtaposition.

173–81 Words in combination: rhythm and period.

182–6 Rhythm and period: theoretical considerations.

187–9 Catulus and Antonius react.

190–8 Prose rhythm: practical considerations.

199–209 Other aspects of ornatus: levels of style, ‘figures’ of speech and thought.

Introduction

In this chapter we look at some extensions of the basic call option model. In Section 8.2 we consider European call options on dividend-paying securities under three different scenarios for how the dividend is paid. In Section 8.2.1 we suppose that the dividend for each share owned is paid continuously in time at a rate equal to a fixed fraction of the price of the security. In Sections 8.2.2 and 8.2.3 we suppose that the dividend is to be paid at a specified time, with the amount paid equal to a fixed fraction of the price of the security (Section 8.2.2) or to a fixed amount (Section 8.2.3). In Section 8.3 we show how to determine the no-arbitrage price of an American put option. In Section 8.4 we introduce a model that allows for the possibilities of jumps in the price of a security. This model supposes that the security's price changes according to a geometric Brownian motion, with the exception that at random times the price is assumed to change by a random multiplicative factor. In Section 8.4.1 we derive an exact formula for the no-arbitrage cost of a call option when the multiplicative jumps have a lognormal probability distribution. In Section 8.4.2 we suppose that the multiplicative jumps have an arbitrary probability distribution; we show that the no-arbitrage cost is always at least as large as the Black–Scholes formula when there are no jumps, and we then present an approximation for the no-arbitrage cost.

Brownian Motion

A Brownian motion is a collection of random variables X(t), t ≥ 0 that satisfy certain properties that we will momentarily present. We imagine that we are observing some process as it evolves over time. The index parameter t represents time, and X(t) is interpreted as the state of the process at time t. Here is a formal definition.

Definition The collection of random variables X(t), t ≥ 0 is said to be a Brownian motion with drift parameter μ and variance parameter σ2 if the following hold:

1. (a) X(0) is a given constant.

2. (b) For all positive y and t, the random variable X(t + y) – X(y) is independent of the the process values up to time y and has a normal distribution with mean μt and variance tσ2.

Assumption (b) says that, for any history of the process up to the present time y, the change in the value of the process over the next t time units is a normal random with mean μt and variance tσ2. Because any future value X(t + y) is equal to the present value X(y) plus the change in value X(t + y) – X(y), the assumption implies that it is only the present value of the process, and not any past values, that determines probabilities about future values.

An important property of Brownian motion is that X(t) will, with probability 1, be a continuous function of t.

An Example in Options Pricing

Suppose that the nominal interest rate is r, and consider the following model for pricing an option to purchase a stock at a future time at a fixed price. Let the present price (in dollars) of the stock be 100 per share, and suppose we know that, after one time period, its price will be either 200 or 50 (see Figure 5.1). Suppose further that, for any y, at a cost of Cy you can purchase at time 0 the option to buy y shares of the stock at time 1 at a price of 150 per share. Thus, for instance, if you purchase this option and the stock rises to 200, then you would exercise the option at time 1 and realize a gain of 200 – 150 = 50 for each of the y options purchased. On the other hand, if the price of the stock at time 1 is 50 then the option would be worthless. In addition to the options, you may also purchase x shares of the stock at time 0 at a cost of 100x, and each share would be worth either 200 or 50 at time 1.

We will suppose that both x and y can be positive, negative, or zero. That is, you can either buy or sell both the stock and the option.

Introduction

The options we have so far considered are sometimes called “vanilla” options to distinguish them from the more exotic options, whose prevalence has increased in recent years. Generally speaking, the value of these options at the exercise time depends not only on the security's price at that time but also on the price path leading to it. In this chapter we introduce three of these exotic-type options – barrier options, Asian options, and lookback options – and show how to use Monte Carlo simulation methods efficently to determine their geometric Brownian motion risk-neutral valuations. In the final section of this chapter we present an explicit formula for the risk-neutral valuation of a “power” call option, whose payoff when exercised is the amount by which a specified power of the security's price at that time exceeds the exercise price.

Barrier Options

To define a European barrier call option with strike price K and exercise time t, a barrier value v is specified; depending on the type of barrier option, the option either becomes alive or is killed when this barrier is crossed. A down-and-in barrier option becomes alive only if the security's price goes below v before time t, whereas a down-and-out barrier option is killed if the security's price goes below v before time t. In both cases, v is a specified value that is less than the initial price s of the security.