Advances in Economics, Management and Political Sciences

- The Open Access Proceedings Series for Conferences


Proceedings of the 2nd International Conference on Business and Policy Studies

Series Vol. 13 , 13 September 2023


Open Access | Article

Option Pricing and Risk Hedging in the Current Financial Market: A Case for Google

Hongji Zhang * 1
1 Paris-Saclay University

* Author to whom correspondence should be addressed.

Advances in Economics, Management and Political Sciences, Vol. 13, 106-114
Published 13 September 2023. © 2023 The Author(s). Published by EWA Publishing
This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
Citation Hongji Zhang. Option Pricing and Risk Hedging in the Current Financial Market: A Case for Google. AEMPS (2023) Vol. 13: 106-114. DOI: 10.54254/2754-1169/13/20230684.

Abstract

In the past few decades, financial derivative securities have been developing rapidly around the world, and the issue of options and investment consumption has attracted more and more attention from mathematicians and financiers at home and abroad. In this paper, option pricing models are constructed and calibrated based on the Black Scholes Merton model, binomial tree model, historical data model and Monte Carlo diffusion model. The differences between different option pricing models for options and stock hedging of the same company in a short period of time are discussed and analyzed. In this article, the Monte Carlo model outperforms the traditional Black Scholes Merton model, while the binomial tree model and the historical data model do not perform well. The results of this paper are beneficial for investors to use the optimal model to predict option prices, weaken the aggregate risk, and improve the aggregate return level.

Keywords

Google, BS, option pricing

References

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Data Availability

The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.

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Volume Title
Proceedings of the 2nd International Conference on Business and Policy Studies
ISBN (Print)
978-1-915371-69-0
ISBN (Online)
978-1-915371-70-6
Published Date
13 September 2023
Series
Advances in Economics, Management and Political Sciences
ISSN (Print)
2754-1169
ISSN (Online)
2754-1177
DOI
10.54254/2754-1169/13/20230684
Copyright
© 2023 The Author(s)
Open Access
This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited

Copyright © 2023 EWA Publishing. Unless Otherwise Stated