Optionally Options Regular Pricing

This paper studies European chooser option’s canonical valuation. The option pricing problem is one of the core issues in the financial market. Therefore, studying the option pricing theory has a very important scientific and practical significance for the financial derivatives market. The traditional nonparametric option pricing method requires a large number of options market price data to predict the price of other options, in contrast, canonical pricing method uses the underlying asset price past data to estimate the payoff distribution at expiration, by doing this, we can have a nonparametric option pricing without depending on the price data of the option pricing market.This paper analyzes the pricing fitting effect of canonical method for chooser option by the underlying asset which obeys the CEV model estimates hypothesis. Its main task is to derive a canonical price formula of European chooser option, and the preparation of the corresponding matlab program based on correlation theory of chooser option canonical pricing method. We compared the canonical estimate pricing with the CEV model theoretical pricing. The data indicate that canonical pricing is an useful pricing methods for optional pricing without strict compliance Black-Scholes assumptions environment and indicate there are the superiorities and inadequacies of the chooser option’s canonical valuation.