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February 9, 2026Filomat0 citationsOpen Access

Long time asymptotics for American maximum option with a dividend-paying asset

YXYongqing Xu

Key Points

  • The aim is to analyze the long time behaviors of optimal boundaries and price functions of American maximum options with dividends.
  • Analyzed integral equations related to optimal boundaries and price functions.
  • Provided rigorous proofs for stated results.
  • Conducted numerical examples to illustrate price and boundaries.
  • Characterized long time behaviors of two optimal boundaries and price functions.
  • Demonstrated practical insights through numerical examples regarding American maximum option.

Abstract

American maximum options provide minimum payoff protections for the investors when the asset?s price falls and bring more profits when the asset?s price rises. It is interesting to explore the properties of them. In this paper, we pay attention to the long time behaviors of two optimal boundaries and the price function of American maximum option with a dividend-paying asset. We provide their long time behaviors by analyzing several integral equations related to the transformed optimal boundaries and the scaled price function and provide rigorous proofs for all results. Numerical examples are carried out to demonstrate the price and boundaries of American maximum option.

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Cite This Study

Yongqing Xu (2025) studied this question.

synapsesocial.com/papers/698979d9f0ec2af6756e7d34https://doi.org/10.2298/fil2510213x
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