Assessment of Options Investments by Ranking Analysis

Download or read book Assessment of Options Investments by Ranking Analysis written by Sergey Izraylevich Ph.D. and published by Pearson Education. This book was released on 2010-07-29 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt: A powerful new technique for evaluating the profit potential of complex option combinations with nonlinear payoffs. Why is an additional analytic tool needed? Generally, evaluation of investment decisions is based on comparing realized profits (variability, drawdown, and other risk measures) with their corresponding expected values. While such an approach is appropriate for financial instruments possessing linear payoff functions, it has numerous drawbacks when applied to evaluating complex option combinations with nonlinear payoffs....