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Towards affective computing in China options trading (2016–2025)

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  • Jiali Du
  • Pingfang Yu

Abstract

Affective computing in options trading focuses on sentiment identification and sentiment analysis for market traders. Fear and greed are intertwined in market trading. The high volatility of the options market often confuses traders about the ongoing paradox of not knowing whether and when to buy or sell. This article creates the Confusion Quotient (CQ) Index to serve the practical application of options trading on the SSE (Shanghai Stock Exchange) 50 ETF in China. The CQ Index is designed to calculate the impact of fear and greed on trading (i.e. the ratio of fear/greed) when a trader is facing an emotional breakdown. In options trading, the sum of the weighted open interest of puts (calls) is ∑WP (∑WC). CQ = Fear/Greed = ∑WP/∑WC. Based on mining and calculations of options trading data of 2089 days in the SSE50ETF, we conclude that the CQ index is a valid indicator which can partially explain the ongoing paradox of fear and greed. The 94 experiments in this article have confirmed the superiority of the CQ index, which may partially help to solve the problem of emotional paradoxes in options trading.

Suggested Citation

  • Jiali Du & Pingfang Yu, 2026. "Towards affective computing in China options trading (2016–2025)," Applied Economics, Taylor & Francis Journals, vol. 58(31), pages 6221-6232, July.
    • Handle: RePEc:taf:applec:v:58:y:2026:i:31:p:6221-6232
    DOI: 10.1080/00036846.2025.2517420
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