Toward An On-Demand Option Rating Service for e-Business

Abstract

With the fast-growing financial markets in Hong Kong and mainland China, corporate or individual investors have to make many important financial investment decisions on a daily basis. To make proper investment decisions, investors usually need to collect and analyze a huge amount of financial data beforehand. Nevertheless, human cognitive power is too limited to extract relevant information from the huge amount of raw data and to develop correct decisions in real-time. This paper illustrates the design and implementation of an open Web services based on-demand financial investment system which specializes in option trading. Corporate or individual Investors can subscribe to the aforementioned financial investment services so as to receive prompt advice for specific types of investment options. The proposed financial investment Web services can autonomously collect large amount of real-time data from various on-line sources and develop accurate predictions according to rigorous investment appraisal models. Based on a user profile, the system can provide personalized recommendation with reference to the specific risk-return trade-off of a subscriber. According to our empirical testing, the proposed option rating service can provide more accurate real-time predictions about the prices of options when compared with the online option calculator provided by a well-known financial investment company.