Management Dynamics

Neha Jain , Neha Sharma , Reenu Agarwal , Salim Akhtar , Sonia Lalchandani

Abstract

If James Taylor had been an options trader, he might well have not written that second line. Options "smile" at traders, but that smile is not a source of happiness. It is in fact a source of considerable confusion and misunderstanding. In this paper, we explore how this confusion manifests in the pattern of different implied volatilities for different options on the same stock, a pattern commonly known as the volatility smile.

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Sonia Lalchandani ¹

Affiliations
1 Jaipuria Institute of Management, Lucknow, IN

Abstract

As far back as we can remember, the earth has been spherical. Paradoxically, it now appears that the world has "flattened". This is due to certain events which have taken shape over the past couple of decades. The consequent transition demands adaption not only from individuals and corporates but also society and nations as a whole. This is precisely the theme of Thomas L. Friedman's latest book "The World is Flat". If one wants to leam about globalization right from scratch, from its cradle to the present adolescent age, then Friedman's book is the right choice.

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