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Numerical Analysis for Spread Option Pricing Model in Illiquid underlying Asset Market: Full Feedback Model

Numerical Analysis for Spread Option Pricing Model in Illiquid underlying Asset Market: Full Feedback Model

This paper performs the numerical analysis and the computation of a Spread option in a market with imperfect liquidity.The number of shares traded in the stock market has a direct impact on the stock's price.Thus, we consider a full-feedback model in which price impact is fully incorporated into the model.The …