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Record W3122719261 · doi:10.1017/s0022109018000777

Good Volatility, Bad Volatility, and Option Pricing

2018· article· en· W3122719261 on OpenAlexafffund
Bruno Feunou, Cédric Okou

Bibliographic record

VenueJournal of Financial and Quantitative Analysis · 2018
Typearticle
Languageen
FieldEconomics, Econometrics and Finance
TopicStochastic processes and financial applications
Canadian institutionsBank of Canada
FundersHEC MontréalUniversité du Québec à Montréal
KeywordsDownside riskSemivarianceVolatility (finance)EconometricsEconomicsQuadratic variationJumpJump diffusionRealized varianceValuation of optionsVariance risk premiumStochastic volatilityFinancial economicsVolatility risk premiumMathematicsStatistics

Abstract

fetched live from OpenAlex

Advances in variance analysis permit the splitting of the total quadratic variation of a jump-diffusion process into upside and downside components. Recent studies establish that this decomposition enhances volatility predictions and highlight the upside/downside variance spread as a driver of the asymmetry in stock price distributions. To appraise the economic gain of this decomposition, we design a new and flexible option pricing model in which the underlying asset price exhibits distinct upside and downside semivariance dynamics driven by the model-free proxies of the variances. The new model outperforms common benchmarks, especially the alternative that splits the quadratic variation into diffusive and jump components.

Fetched live from OpenAlex and de-inverted. Abstracts are not stored in this database: the inverted indexes are 8.6 GB of the frame’s 9.3 GB of text, and the host has 13 GB free.

How this classification was reachedexpand

Full frame machine prediction

Teacher imitation

Not calibrated prevalence, not ground truth. Human validation pending. The Gemma side is a direct model label for every work in the frame, read from the title-only record. The Codex side is a classifier learned from the 10,348 direct Codex labels and calibrated to design-weighted sample rates; fields without enough sample support carry no Codex call. Candidate is the union of the two sides; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels.

metaresearch head score (Codex)0.002
metaresearch head score (Gemma)0.009
Version: metacan-v3-hybrid-931329e0061cValidation status: machine_predicted_unvalidated
Candidate categoriesnone
Consensus categoriesnone
DomainCandidate signal: none · Consensus signal: none
Study designCandidate signal: Theoretical or conceptual · Consensus signal: Theoretical or conceptual
GenreCandidate signal: Empirical · Consensus signal: Empirical
Teacher disagreement score0.002
Threshold uncertainty score0.010

Distilled classifier scores by category (both heads)

CategoryCodexGemma
Metaresearch0.0020.009
Meta-epidemiology (narrow)0.0010.000
Meta-epidemiology (broad)0.0010.000
Bibliometrics0.0010.001
Science and technology studies0.0000.003
Scholarly communication0.0020.003
Open science0.0010.001
Research integrity0.0010.001
Insufficient payload (model declined to judge)0.0020.000

Machine scores (provisional)

The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.

Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.

Opus teacher head0.034
GPT teacher head0.277
Teacher spread0.243 · how far apart the two teachers sit on this one work
Validation statusscore_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from it

Classification

machine, unvalidated

Machine predicted; a candidate call from one source (direct Gemma or distilled Codex), not a consensus.

The models applied no category: nothing in the taxonomy fit this work.
Study designTheoretical or conceptual
Domainnot available
GenreEmpirical

How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".

Quick stats

Citations62
Published2018
Admission routes2
Has abstractyes

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