Using Stochastic Process Simulations to Forecast Stocks

I good alternative to using historical volatility to forecast 35 weeks ahead may be to use an implied volatility from the options market. The market price of the option contract that expires 35 weeks later can be used to “reverse-engineer” the market’s expected volatility over the forecast period. This may be the subject of my next post!

 

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s