Subordinated Levy Processes and Applications to Crude Oil Options /

One approach to oil markets is to treat oil as an asset, besides its role as a commodity. Speculative and nonspeculative activity by investors in the derivatives markets could be responsible for a sizable increase in oil prices. This paper recognizes both the consumption and investment aspects of cr...

Disgrifiad llawn

Manylion Llyfryddiaeth
Prif Awdur: Krichene, Noureddine
Fformat: Cylchgrawn
Iaith:English
Cyhoeddwyd: Washington, D.C. : International Monetary Fund, 2005.
Cyfres:IMF Working Papers; Working Paper ; No. 2005/174
Mynediad Ar-lein:Full text available on IMF
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020 |z 9781451861938 
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100 1 |a Krichene, Noureddine. 
245 1 0 |a Subordinated Levy Processes and Applications to Crude Oil Options /  |c Noureddine Krichene. 
264 1 |a Washington, D.C. :  |b International Monetary Fund,  |c 2005. 
300 |a 1 online resource (26 pages) 
490 1 |a IMF Working Papers 
500 |a <strong>Off-Campus Access:</strong> No User ID or Password Required 
500 |a <strong>On-Campus Access:</strong> No User ID or Password Required 
506 |a Electronic access restricted to authorized BRAC University faculty, staff and students 
520 3 |a One approach to oil markets is to treat oil as an asset, besides its role as a commodity. Speculative and nonspeculative activity by investors in the derivatives markets could be responsible for a sizable increase in oil prices. This paper recognizes both the consumption and investment aspects of crude oil and proposes Levy processes for modeling uncertainty and options pricing. Calibration to crude oil futures' options shows high volatility of oil futures prices, fat-tailed, and right-skewed market expectations, implying a higher probability mass on crude oil prices remaining above the futures' level. These findings support the view that demand for futures contracts by investors could lead to excessively high price volatility. 
538 |a Mode of access: Internet 
830 0 |a IMF Working Papers; Working Paper ;  |v No. 2005/174 
856 4 0 |z Full text available on IMF  |u http://elibrary.imf.org/view/journals/001/2005/174/001.2005.issue-174-en.xml  |z IMF e-Library