Volume 15, Issue 4
A simple analytical and numerical approach for pricing compound options

D. Ding, C. K. Leong & X. Q. Jin

Numer. Math. J. Chinese Univ. (English Ser.)(English Ser.) 15 (2006), pp. 367-374

Published online: 2006-11

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  • Abstract
A compound option is simply an option on an option. In this short paper, by using a martingale technique, we obtain an analytical formula for pricing compound European call options. Numerical results are given to explain some economic phenomenon.
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@Article{NM-15-367, author = {D. Ding, C. K. Leong and X. Q. Jin }, title = {A simple analytical and numerical approach for pricing compound options}, journal = {Numerical Mathematics, a Journal of Chinese Universities}, year = {2006}, volume = {15}, number = {4}, pages = {367--374}, abstract = { A compound option is simply an option on an option. In this short paper, by using a martingale technique, we obtain an analytical formula for pricing compound European call options. Numerical results are given to explain some economic phenomenon. }, issn = {}, doi = {https://doi.org/}, url = {http://global-sci.org/intro/article_detail/nm/8043.html} }
TY - JOUR T1 - A simple analytical and numerical approach for pricing compound options AU - D. Ding, C. K. Leong & X. Q. Jin JO - Numerical Mathematics, a Journal of Chinese Universities VL - 4 SP - 367 EP - 374 PY - 2006 DA - 2006/11 SN - 15 DO - http://doi.org/ UR - https://global-sci.org/intro/article_detail/nm/8043.html KW - AB - A compound option is simply an option on an option. In this short paper, by using a martingale technique, we obtain an analytical formula for pricing compound European call options. Numerical results are given to explain some economic phenomenon.
D. Ding, C. K. Leong and X. Q. Jin . (2006). A simple analytical and numerical approach for pricing compound options. Numerical Mathematics, a Journal of Chinese Universities. 15 (4). 367-374. doi:
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