The Application Of American Barrier Option In Emission Trading

There is no essential difference between emissions trading and sewage trading.In recent years,the frequent occurrence of climate disasters,the total amount of emissions should be better control.But compared with the rapid development of the domestic economic activities and resources,although our management departments have begun a long time emission emissions trading pilot,and achieved some success,but the trading volume is still bleak.The reason,the biggest factor is the trading system is not perfect,trading and derivative products,not widely used,making the market atmosphere is not active,while the nature of sewage emissions greatly and financial derivatives are similar by many literatures to understand,of China's pollution emission market after,from research to practice this change,from scratch,but is still in the initial stage of a stones,better pricing mechanism and market mechanism from the economic and financial market for reference,starting from the common points and double effect can realize control and market development.Therefore,the mature financial products should be based on the characteristics of flexible application industry in the industry,increase the vitality of the transaction into sales,to attract more funds,after the adjustment of the market itself,to achieve the rational allocation of resources to the final control.Based on this idea,with the innovation of this paper,the author puts forward the idea of making the emission rights index into a kind of option in the market,which is used to increase the vitality of the market,to attract financial capital to intervene,and to accelerate the pace of development.According to the nature of emissions trading,recommended introduction of the American barrier option,is introduced in this paper on the option pricing theory of the American barrier,the two approximation method and Monte Carlo simulation are briefly introduced and analyzed,on the the Binary Tree pricing was deduced and recommended,and thecalculation of volatility was improved by fuzzy theory.The use of options in the sewage emission rights,carry out preliminary analysis of cost control method,the American barrier option and recommend more market value,in order to increase the industry more financial derivatives to achieve the government effective supervision,cost control and prevention of primary market risk and achieve market allocation by financial means.If you can get emissions trading model,the product is more exciting inspiration.We hope that exotic options and other financial products can be widely used in emissions trading.