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arXiv 2017-12-14 0 views

The evaluation of geometric Asian power options under time changed mixed fractional Brownian motion

Shokrollahi, Foad

Original · EN

The aim of this paper is to evaluate geometric Asian option by a mixed fractional subdiffusive Black-Scholes model. We derive a pricing formula for geometric Asian option when the underlying stock follows a time changed mixed fractional Brownian motion. We then apply the results to price Asian power options on the stocks that pay constant dividends when the payoff is a power function. Finally, lower bound of Asian options and some special cases are provided.

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