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by jc1022
October 14th, 2022, 6:27 am
Forum: Student Forum
Topic: Earning bid/offer when delta hedging
Replies: 1
Views: 2711

Earning bid/offer when delta hedging

I remember once reading about a theory that option premiums were empirically higher than the value implied from models like black-scholes as it allowed the holder of the option to capture (rather than incur) the bid/offer spread. Does anyone know what papers/books talk about such theory?