Although most financial market anomalies have been studied in securities markets, the options market has shown evidence of its own anomaly in the performance of covered calls on the S&P 500. This finding is puzzling in that this index is clearly a zero-alpha investment with very high volume...

The word spelled f-i-n-a-n-c-e has two common pronunciations, one accenting the first syllable and the other accenting the second. English etymology, however, provides no indication of which pronunciation is preferred and which is more commonly used. Given that language evolves from human usage...

The finance literature has revealed no fewer than 11 alternative versions of the binomial option pricing model for options on lognormally distributed assets. These models are derived under a variety of assumptions and in some cases require information that is ordinarily unnecessary to value...

In spite of what appears to be widespread knowledge of option pricing theory, there remain some subtle points that are not well-known. For example, option prices are not always directly related to volatility, and risk-neutral investors, if they really existed, would be driven from the market by...

Using a unique data set with complete firm-level components of currency positions, we examine whether large multinational non-financial firms are speculating or hedging as they manage their currency spot and derivatives positions. We find a notable discord between the stated policies of...