Option Pricing Approach and Its Application Based on Abel Equation

摘要

Financial derivative is one kind of financial instrument with high leverage ratio, high risk and high returns. Therefore, in it important to help investors to adopt appropriate risk control measures to judge the trend of the price change of financial derivatives. The trend of financial derivatives prices has been analyzed by solving the responding Abel equation. At last, we illustrate the scheme by testing several ETFs in the market for the system.