Project 1. In this project we build two portfolios, one less and the other more risky and study their returns
Project 2. Here we study distributions of the log returns of the market as well as of our two portfolios and establish if the said distributions are normal or not.
Project 3. We plot and study the behaviour of the BS modeled European options value and their response functions (AKA greeks) as a function of time to expiration and the spot price. We notice some interesting trends that open door to different hedging strategies
Project 4. In this project we study the effects of the dynamic variability i.e variability that changes over time and its effects on the return of a portfolio consisting of a sold call option which is delta hedged. We build a vega hedging strategy to offset the loses incured by the oscillations of the variance.