Marc Jeannin

  1. Pricing and hedging barrier options in a hyper-exponential additive model.

    Authors: Martijn Pistorius, Marc Jeannin
    Subjects: Pricing of Securities
    Abstract

    In this paper we develop an algorithm to calculate the prices and Greeks of
    barrier options in a hyper-exponential additive model with piecewise constant
    parameters. We obtain an explicit semi-analytical expression for the
    first-passage probability. The solution rests on a randomization and an
    explicit matrix Wiener-Hopf factorization. Employing this result we derive
    explicit expressions for the Laplace-Fourier transforms of the prices and
    Greeks of barrier options.

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