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Few issues are more important for finance practice than the computation of market betas. Existing approaches compute market betas using historical data. While these approaches differ in terms of statistical sophistication and the modeling of the time-variation in the betas, they are all backward-looking. This paper introduces a radically different approach to estimating market betas. We use information embedded in the prices of individual stock options and index options to compute adoi:10.2139/ssrn.1150646 fatcat:rpj6vgcgurceffcqeh7jn6y4wq