D‐TIFIS: a decision support system for options trading

Some analysts have claimed that the volatility of an asset is caused solely by the random arrival of new information about the future returns from the asset. Others have claimed that volatility is mainly caused by trading. In any case it is a common belief that volatility is of great importance in finance and it is the factor that plays the most important role in determining option prices. This paper discusses the development of a decision support system (D‐TIFIS) for options trading based on volatility forecasting. In order to evaluate the system, data were used from the Greek FTSE/ASE 20 stock index as well as at the money call and put prices on the specific index.