Best method of multi-criteria analysis

摘要

Multiple criteria are typically used to analyze potential individual equity option trades. In this first of two parts, we introduce the most efficient approach for selecting these criteria: the Pareto-optimality.rnThe individual equity options market provides a wide choice of potential trading opportunities. To make investment decisions in this varied arena, traders generally apply complex rules to different criteria that estimate the value and appropriateness of assets.rnAlthough the selection process may be based on a single criterion, in practice more valuation procedures are executed in the course of portfolio structuring. The most common example of multi-criteria analysis (MCA) selects assets based on two measures: expected return and risk.