Proceedings of the 2022 International Conference on Social Sciences and Humanities and Arts (SSHA 2022)

<Previous Article In Volume
Next Article In Volume>

Analysis of the Premium of American Option Based on both Mathematical Method and Python

Authors
Bodan Yang1, *, Chenxi Xia2, 22681517@student.uwa.edu.au, Shangbin Ye3, Shangbin.ye@gmail.com, Jiajin Chen4, russellchanfrm@gmail.com
1Economics and Social Science,University of Manchester, Manchester, M139PL, the United Kingdom,bodan.yang@student.manchester.ac.uk
2Business School, University of Wesern Australia, Perth, 6907, Australia
3Richard A. Chaifetz School of Business, Saint Louis University, Saint Louis 63108, the United States
4BNU-HKBU United International College, Zhuhai, Guangdong 519087, China
Corresponding Author
Bodan Yang
Available Online 8 April 2022.
DOI
10.2991/assehr.k.220401.064How to use a DOI?
Keywords
American calls and puts; European calls and puts; option premium
Abstract

This paper mainly analyzes the influence of different factors on the price of American call option and put option and European call option and put option. This paper mainly considers the option premium from four aspects: strike price, up factor, down factor, and interest rate. First, this paper discusses the possible situation of stock prices in different periods, and then gives the corresponding market decisions and the consequences of the corresponding market decisions according to different situations. In each case, this paper shows the process of option premium change through binomial tree diagram and a lot of formula analysis, and then compares the American option with the European option. Through this paper, people can have a basic understanding of American option and European option, and people can have a deeper understanding of the operating logic behind them.

Copyright
© 2022 The Authors. Published by Atlantis Press SARL.
Open Access
This is an open access article distributed under the CC BY-NC 4.0 license.

Download article (PDF)

<Previous Article In Volume
Next Article In Volume>
Volume Title
Proceedings of the 2022 International Conference on Social Sciences and Humanities and Arts (SSHA 2022)
Series
Advances in Social Science, Education and Humanities Research
Publication Date
8 April 2022
ISBN
10.2991/assehr.k.220401.064
ISSN
2352-5398
DOI
10.2991/assehr.k.220401.064How to use a DOI?
Copyright
© 2022 The Authors. Published by Atlantis Press SARL.
Open Access
This is an open access article distributed under the CC BY-NC 4.0 license.

Cite this article

risenwbib
TY  - CONF
AU  - Bodan Yang
AU  - Chenxi Xia
AU  - Shangbin Ye
AU  - Jiajin Chen
PY  - 2022
DA  - 2022/04/08
TI  - Analysis of the Premium of American Option Based on both Mathematical Method and Python
BT  - Proceedings of the 2022 International Conference on Social Sciences and Humanities and Arts (SSHA 2022)
PB  - Atlantis Press
SP  - 320
EP  - 327
SN  - 2352-5398
UR  - https://doi.org/10.2991/assehr.k.220401.064
DO  - 10.2991/assehr.k.220401.064
ID  - Yang2022
ER  -