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We derive the short-maturity asymptotics for European and VIX option prices in local-stochastic volatility models where the volatility follows a continuous-path Markov process. Both out-of-the-money (OTM) and at-the-money (ATM) asymptotics…

证券定价 · 定量金融 2024-07-25 Dan Pirjol , Xiaoyu Wang , Lingjiong Zhu

We study the short maturity asymptotics for prices of forward start Asian options under the assumption that the underlying asset follows a local volatility model. We obtain asymptotics for the cases of out-of-the-money, in-the-money, and…

证券定价 · 定量金融 2019-08-19 Dan Pirjol , Jing Wang , Lingjiong Zhu

We present a rigorous study of the short maturity asymptotics for Asian options with continuous-time averaging, under the assumption that the underlying asset follows a local volatility model. The asymptotics for out-of-the-money,…

证券定价 · 定量金融 2016-12-16 Dan Pirjol , Lingjiong Zhu

We derive the short-maturity asymptotics for prices of options on realized variance in local-stochastic volatility models. We consider separately the short-maturity asymptotics for out-of-the-money and in-the-money options cases. The…

证券定价 · 定量金融 2025-11-19 Dan Pirjol , Xiaoyu Wang , Lingjiong Zhu

Most of the existing methods for pricing Asian options are less efficient in the limit of small maturities and small volatilities. In this paper, we use the large deviations theory for the analysis of short-maturity Asian options. We…

证券定价 · 定量金融 2024-09-17 Humayra Shoshi , Indranil SenGupta

We present a study of the short maturity asymptotics for Asian options in a jump-diffusion model with a local volatility component, where the jumps are modeled as a compound Poisson process. The analysis for out-of-the-money Asian options…

证券定价 · 定量金融 2024-05-08 Dan Pirjol , Lingjiong Zhu

We derive the short-maturity asymptotics for option prices in the local volatility model in a new short-maturity limit $T\to 0$ at fixed $\rho = (r-q) T$, where $r$ is the interest rate and $q$ is the dividend yield. In cases of practical…

证券定价 · 定量金融 2024-02-23 Dan Pirjol , Lingjiong Zhu

We present a rigorous study of the short maturity asymptotics for Asian options with continuous-time averaging, under the assumption that the underlying asset follows the Constant Elasticity of Variance (CEV) model. We present an analytical…

证券定价 · 定量金融 2019-03-27 Dan Pirjol , Lingjiong Zhu

This study investigates the short-term asymptotic behavior of the implied volatility surface (IVS), with a particular focus on the at-the-money (ATM) skew and curvature, which are key determinants of the IVS shape and whose are widely…

证券定价 · 定量金融 2025-06-24 Liexin Cheng , Xue Cheng

We study the dynamics of the normal implied volatility in a local volatility model, using a small-time expansion in powers of maturity T. At leading order in this expansion, the asymptotics of the normal implied volatility is similar, up to…

计算金融 · 定量金融 2015-03-19 Viorel Costeanu , Dan Pirjol

We present a study of the short-maturity asymptotics for VIX and European option prices in local-stochastic volatility models with compound Poisson jumps. Both out-of-the-money (OTM) and at-the-money (ATM) asymptotics are considered. The…

证券定价 · 定量金融 2026-01-27 Desen Guo , Dan Pirjol , Xiaoyu Wang , Lingjiong Zhu

This paper discusses the short-maturity behavior of Asian option prices and hedging portfolios. We consider the risk-neutral valuation and the delta value of the Asian option having a H\"older continuous payoff function in a local…

数理金融 · 定量金融 2024-04-30 Jaehyun Kim , Hyungbin Park , Jonghwa Park

In this paper, we study stochastic volatility models in regimes where the maturity is small, but large compared to the mean-reversion time of the stochastic volatility factor. The problem falls in the class of averaging/homogenization…

证券定价 · 定量金融 2012-08-22 Jin Feng , Jean-Pierre Fouque , Rohini Kumar

In this paper we study the short-time behavior of the at-the-money implied volatility for arithmetic Asian options with fixed strike price. The asset price is assumed to follow the Black-Scholes model with a general stochastic volatility…

数理金融 · 定量金融 2024-03-05 Elisa Alòs , Eulalia Nualart , Makar Pravosud

The implied volatility skew has received relatively little attention in the literature on short-term asymptotics for financial models with jumps, despite its importance in model selection and calibration. We rectify this by providing…

数理金融 · 定量金融 2015-12-15 José E. Figueroa-López , Sveinn Ólafsson

We derive a nonparametric higher-order asymptotic expansion for small-time changes of conditional characteristic functions of It\^o semimartingale increments. The asymptotics setup is of joint type: both the length of the time interval of…

统计金融 · 定量金融 2025-02-12 Carsten H. Chong , Viktor Todorov

This article addresses the problem of approximating the price of options on discrete and continuous arithmetic average of the underlying, i.e. discretely and continuously monitored Asian options, in local volatility models. A…

计算金融 · 定量金融 2018-08-13 Louis-Pierre Arguin , Nien-Lin Liu , Tai-Ho Wang

A small-time Edgeworth expansion of the density of an asset price is given under a general stochastic volatility model, from which asymptotic expansions of put option prices and at-the-money implied volatilities follow. A limit theorem for…

计算金融 · 定量金融 2019-03-25 Omar El Euch , Masaaki Fukasawa , Jim Gatheral , Mathieu Rosenbaum

In this paper, we study the asymptotic behavior of Asian option prices in the worst case scenario under an uncertain volatility model. We give a procedure to approximate the Asian option prices with a small volatility interval. By imposing…

证券定价 · 定量金融 2018-08-03 Yuecai Han , Chunyang Liu

We study the short-time asymptotics of conditional expectations of smooth and non-smooth functions of a (discontinuous) Ito semimartingale; we compute the leading term in the asymptotics in terms of the local characteristics of the…

概率论 · 数学 2012-02-08 Amel Bentata , Rama Cont
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