The Bjerksund-Stensland model is a key method for pricing American options. It helps investors determine optimal times for exercising options with dividends considered.

Fuzzy set theory has emerged as a powerful tool to address the inherent imprecisions and uncertainties in financial modelling, notably in option pricing. By incorporating fuzziness into conventional ...

Learn About an Important Method for Valuing Derivatives and Other Assets Gordon Scott has been an active investor and technical analyst or 20+ years. He is a Chartered Market Technician (CMT). Timothy ...

Our method for call options is summarised in the following algorithm: (1) We device the time interval into the grid 0≡t_0<t_1<...<t_n≡T and let D_0,D_1...,D_n be some values for the underlying asset ...

Deep learning is increasingly used in financial modeling, but its lack of transparency raises risks. Using the well-known Heston option pricing model as a benchmark, researchers show that global ...

The left side represents the theoretical framework; the top middle contains a labeled box with a circumscribed circle displaying the call and put option prices (c, p), as well as the delta and vega ...

Option pricing is calculated using the Black-Scholes model, which takes four influential factors into account: the price of an underlying stock (assuming constant drift and volatility), an option’s ...

Low-income economies face negative shocks whose frequency and disproportionate impact overcome growth trajectories, producing a negative drift. COVID-19 was the latest such episode. To escape this ...

Options trading can often be complex, but understanding how these financial instruments are priced is crucial for anyone diving into this market. Options derive their value from an underlying asset, ...