Quote from Skog:
Two reputable writers in the Quant community (Haug and Taleb) don't see Black-Scholes-Merton as such a groundbreaking model at all and that the options markets before BSM were already extremely sophisticated.
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1012075
In that case, Russell Sage and his option pricing skills have been serverely underestimated.