Photo by ThisisEngineering RAEng on Unsplash

In this article, we’ll talk about the most famous formula in finance. Perhaps some readers looked at the derivation of the Black-Scholes formula once, saw phrases like ‘continuously revised delta hedging’ and decided that all options are priced according to some dark magic. I want to provide a very intuitive derivation of the Black-Scholes formula without second-order differential equations and hardcore mathematics. In fact, I’d like to simply calculate an expected value of an option, and link it to the Monte-Carlo simulation of an Options price.

Note: In this article, I will consider the European call option. This is a…

Picture from Reddit, Picture source

Unless you virtually ignore any news about the stock market, you should have heard about GME (very briefly: people in one of the brunches of Reddit coordinated and pushed the stock price of a dying computer games firm ‘to the moon’). In this post, we’ll explore what happened on Reddit during these volatile times.

In order to do so we’ll:

  1. Scrape comments from Reddit’s Wall Street Bets branch. Alternatively, it’s possible to use this dataset, but it’s not very extensive
  2. Perform sentiment analysis using VADER Sentiment and Bert model
  3. Get some interesting graphs and talk about them
  4. Create an RNN…

Dmitriy Knyazhitskiy

Student at Erasmus School of Economics. Passionate about Data Science and Finance

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