Construction Evaluation of Three Outperformance Options

Zibo Wang
2021 BCP Business & Management  
Locking the most promising company in a certain industry at an early stage is appealing for all investors, especially when the industry's capacity and prospect can be confirmed. The article tries to create three different special options to help investors to achieve this goal. Specifically, the construction process is based on outperformance options, Black-Scholes model, and some special valuation methods. According to the calculation, the price and the power of each future options are
more » ... ted clearly. Investors can choose one of them to satisfy their requirement for investment return and preference for risk. Four factors related to the price of the future options are also assessed based on sensitive analysis, i.e., one can understand the internal structure of the future options clearly. However, the research is based on the hypothesis that only 2 companies exist in the industry and people can determine the future of the industry. Therefore, following research can focus on multi-companies' industry and add more uncertain elements to make the results and process more general. These results shed light on eliminating the uncertainty of intra-industry competition, locking the industry leader early and increasing the investment return.
doi:10.54691/bcpbm.v15i.221 fatcat:iunxagnxg5dqxjznlszzjbwgyu