Equity Portfolio Management Using Option Price Information

Peter Christoffersen, Xuhui (Nick) Pan

Research output: Working paperResearch

Abstract

We survey the recent academic literature that uses option-implied information to construct equity portfolios. Studies show that equity managers can earn a positive alpha by using information in individual equity options, by using stocks' exposure to information in market index options, and by using stocks' exposure to crude oil option information. Option-implied information can also help construct better mean-variance portfolios and better estimates of market beta.
Original languageEnglish
Place of PublicationAarhus
PublisherAarhus Universitetsforlag
Number of pages29
DOIs
Publication statusPublished - 2015
SeriesCreates Research Paper
Number2015-5
SeriesRotman School of Management Working Paper
Number2419587

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