Entropic Dynamics of Stocks and European Options

  title={Entropic Dynamics of Stocks and European Options},
  author={M. Abedi and D. Bartolomeo},
We develop an entropic framework to model the dynamics of stocks and European Options. Entropic inference is an inductive inference framework equipped with proper tools to handle situations where incomplete information is available. The objective of the paper is to lay down an alternative framework for modeling dynamics. An important information about the dynamics of a stock’s price is scale invariance. By imposing the scale invariant symmetry, we arrive at choosing the logarithm of the stock’s… Expand
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