Correct usage of transmission coefficient for timing the market
AbstractTraders and investors involved in an option contract having the underlying stock in range bound are likely to lose their initial investment. Timing in buying an option contract is of capital importance. In a recent article  the hypothesis of range bound market is used in conjunction to Black-Scholes equation to find the transmission coefficient relation that help market professionals to correctly timing their investment and risk taking decisions. The present paper explores the theoretical basis of transmission coefficient and its empirical evidence on the market.
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Bibliographic InfoPaper provided by arXiv.org in its series Papers with number 1307.5975.
Date of creation: Jul 2013
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Web page: http://arxiv.org/
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-07-28 (All new papers)
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- Ovidiu Racorean, 2013. "Time-independent pricing of options in range bound markets," Papers 1304.6846, arXiv.org, revised Jul 2013.
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