Previous Research on Pricing Models

But the question remains, is the option I bought worth $2, or is it worth more than $2, or less? Many models have been proposed to answer this question. Heretofore, these models have been evaluated using economic analysis, using traditional economic theory. However, there has not been an analysis of how these models perform under actual market conditions. Considering that the purpose of option pricing models is to assist firms in determining a suitable price to purchase and sell options, it would be wise to analyze how option pricing models perform in the same markets from which they will be utilized. The goal of this project is to perform this numerical analysis, to determine which option pricing model performs best in the actual options market.