Comparison of American, European, and Exotic Options and Pricing Methods

Jiaxuan Wang ()
Additional contact information
Jiaxuan Wang: University of Pennsylvania, School of Arts and Sciences

A chapter in Proceedings of the 9th International Conference on Financial Innovation and Economic Development (ICFIED 2024), 2024, pp 318-328 from Springer

Abstract: Abstract As a matter of fact, the valuation of options is a fundamental element of financial markets and investment in general especially in recent years. With this in mind, this study provides an overview and analysis of three commonly used options as well as the methods used to price them. To be specific, these options include the Binomial tree model, the Black-Scholes Model, and Monte Carlo simulations. Additionally, recent research on option pricing is presented, highlighting various aspects such as flexibility, pricing premiums, market predictability strategy, and investor suitability. At the same time, this study examines the constraints of existing research and identifies prospective domains for further study. According to the analysis, the main aim of this study is to introduce and contrast three different choices along with their respective pricing systems. In the meantime, it also aims to extend current research concerns and provide guidance to future researchers, which shed light on guiding further exploration of option pricing.

Keywords: American Options; European Options; Exotic Options; Binomial Tree Model; Monte Carlo Simulations (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-408-2_36

Ordering information: This item can be ordered from
http://www.springer.com/9789464634082

DOI: 10.2991/978-94-6463-408-2_36

Access Statistics for this chapter

More chapters in Advances in Economics, Business and Management Research from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().