Abstract
Based on the importance of the pricing model of financial derivatives, this paper points out the defects and risks of the current model and proposes some possible solutions. The research method is mainly to summarize the framework of the existing model by searching the academic literature and commercial examples related to the pricing model. The final conclusion is that an obvious flaw of the pricing model is that it is based on an idealized market state and cannot predict hidden market trends, but through random volatility, consideration of market friction, and the development of mathematical technology, the market can refine the pricing model. Research and forecast risk premium, market liquidity and asset price changes in advance when considering pricing. In addition, the market is also supported to consider the application of large machines in the portfolio as well as the issue of options panels, so as to deepen the understanding of the movement of financial products.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
More From: Advances in Economics, Management and Political Sciences
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.