The Formation and Development of Options and Pricing Models

Zhile Cheng

doi:10.54254/2754-1169/20/20230166

Research Article

Open access

Published on 13 September 2023

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Cheng,Z. (2023). The Formation and Development of Options and Pricing Models. Advances in Economics, Management and Political Sciences,20,25-31.

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The Formation and Development of Options and Pricing Models

Zhile Cheng *^,1,

¹ Xi’an Jiaotong-Liverpool University

* Author to whom correspondence should be addressed.

https://doi.org/10.54254/2754-1169/20/20230166

Abstract

Option, BSM and mean-variance pricing model have always been hot topics in financial statistics, as well as basic concepts to master when learning financial knowledge and engaging in the financial industry. With the increasingly mature theoretical research on financial risk control, many pricing models related to risk control have been established based on BSM model and mean-variance model. Therefore, this paper mainly studies BSM model and mean-variance model. So, this paper mainly discusses the learning achievements of option contract, BSM model and mean-variance model. Firstly, this paper introduces the basic concept of option contract, explains what option contract is, the components of option contract, and the formation history and development process of option and option contract. Secondly, the formation and development process of BSM model and mean-variance model are explained respectively in the work, and related concepts are described and explained rationally. From the historical and realistic point of view, this paper explains the risk avoidance effect of option contract, BSM model and mean-variance model on financial transactions.

Keywords

finance, option contract, BSM model, mean-variance model

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References

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Cite this article

Cheng,Z. (2023). The Formation and Development of Options and Pricing Models. Advances in Economics, Management and Political Sciences,20,25-31.

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About volume

Volume title: Proceedings of the 2023 International Conference on Management Research and Economic Development

Conference website: https://2023.icmred.org/

ISBN：978-1-915371-83-6(Print) / 978-1-915371-84-3(Online)

Conference date: 28 April 2023

Editor：Canh Thien Dang, Javier Cifuentes-Faura

Series: Advances in Economics, Management and Political Sciences

Volume number: Vol.20

ISSN：2754-1169(Print) / 2754-1177(Online)

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