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Please answer in detail, than you
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Please answer in detail, than you
Please answer in detail, than you
Discuss the economic and ethical implications of two of the following three options strategies. Strategy 1: In the aftermath of the 2011 Tohoku earthquake and Tsunami in Japan, a number of investors opted to buy long-term medium implied volatility OTM call options on European and US indexes instead of buying high implied volatility put options on these indices and on the Nikkei 225 index. Examples of index call options traded include amongst others: Euro Stoxx 50 and S&P 500 options. Strategy 2: "Investors in companies creating disruptive or radical innovations can improve the returns to their investment by utilizing asymmetric information and purchasing put options or similar contracts on the stock of rival firms before knowledge about the success of the disruptive innovation is widely known." Baden-Fuller et al. (2006), Journal of Business Venturing Strategy 3: “Long straddle positions in currencies with low (high) implied volatilities (IV) perform well (poorly). A long low IV-short high IV strategy produces large average returns after transaction costs." Fullwood et al. (2021), Journal of Financial Economics
Discuss the economic and ethical implications of two of the following three options strategies. Strategy 1: In the aftermath of the 2011 Tohoku earthquake and Tsunami in Japan, a number of investors opted to buy long-term medium implied volatility OTM call options on European and US indexes instead of buying high implied volatility put options on these indices and on the Nikkei 225 index. Examples of index call options traded include amongst others: Euro Stoxx 50 and S&P 500 options. Strategy 2: "Investors in companies creating disruptive or radical innovations can improve the returns to their investment by utilizing asymmetric information and purchasing put options or similar contracts on the stock of rival firms before knowledge about the success of the disruptive innovation is widely known." Baden-Fuller et al. (2006), Journal of Business Venturing Strategy 3: “Long straddle positions in currencies with low (high) implied volatilities (IV) perform well (poorly). A long low IV-short high IV strategy produces large average returns after transaction costs." Fullwood et al. (2021), Journal of Financial Economics
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