%0 Journal Article
%T Option Price Estimations and Speculative Trading In Knowledge Society
%A Ovidiu TURCOANE
%J Informatica Economica Journal
%D 2012
%I Inforec Association
%X Derivatives market has known an enormous and continuous development from the late 1970s, thanks to the most celebrated Black-Scholes-Merton formula. The impact on global economy is also tremendous, but due to the high leverage of speculative option trading there is a perpetual danger of economic collapse. This paper gives a short description of knowledge society and proposes methods for option price estimation based on implied volatility, skewness and kurtosis. ¡®Free-lunch¡¯ is hardly achievable if one predicts the option price using the knowledgeable information from the market and there is almost impossible to speculate, rather than to hedge, when trading option.
%K Ethics
%K Knowledge Society
%K Option Pricing
%K Implied Volatility
%K Skewness
%K Kurtosis
%K Minimization Algorithm
%U http://www.revistaie.ase.ro/content/64/15%20-%20Turcoane.pdf