The basic mathematical theory for option pricing in financial markets at discrete and continuous time

G.M. Vostrov and O.R. Alaо
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G.M. Vostrov: Odessa National Polytechnic University, Odessa, Ukraine
O.R. Alaо: Odessa National Polytechnic University, Odessa, Ukraine

Economics: time realities Экономика: реалии времени, 2014, issue 6 (16), 183-187

Abstract: This article covers the basics of the mathematical theory of pricing of options in financial markets; where we show that, it is possible to build a multi-period multinomial discrete model any time step t and any duration. The model describes the stochastic differential equations which includes the movements of parameters and the volatility; which in general, is also a very random processes folded nature.

Keywords: financial markets; pricing options; multinomial models; stochastic processes; volatility (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:scn:032811:16525876

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