How to open a multiple page PDF file as artboards in Illustrator CS6

I'm trying to open a PDF file with 7 pages and need to adjust each page in Illustrator CS6. How do I open the PDF file in one single AI files with all artboards within it?

BInary Option implied volaltility

How is implied vol calculated if the quoted prices are out of the range for any possible volatility? E.g. Current quote on CBOE for options expiring on Aug 16, 2014

Calls   Last Sale   Net     Bid     Ask     Vol     Open Int    
BSZ1416H1900-E  0.0     0.0     0.66    0.81    0   0   14 Aug 1900.00      BSZ1416T1900-E  0.0     0.0     0.20    0.32    0   0

BSZ1416H1950-E  0.0     0.0     *0.45   0.60*   0   0   14 Aug 1950.00       BSZ1416T1950-E     0.0     0.0     0.40    0.55    0   0
BSZ1416H2000-E  0.0     0.0     0.20    0.32    0   0   14 Aug 2000.00      BSZ1416T2000-E  0.0     0.0     0.67    0.82    0   0

For BSZ1416H1950-E both the bid and ask are outside of the range. (cannot upload the picture I created, it showed that max value attainable is .4 around 50% volatility.

Normally supply/demand, liquidity are all figured into IV. How do you find IV? What is the mechanism to handle such things for building vol surface? How are such differences used, in a control variate like manner, perhaps, to estimate the price at some time in the future? Thanks.

Answer

Are you sure you are using the correct pricing formula.

For a binary (digital) call that pays $1$, the simple Black-Scholes price at time $t=0$ is

$$ C_d = e^{-rT}N(d_2)$$ $$d_2 = \frac{\text{ln}(F/K) - \frac1{2}\sigma^2T}{\sigma \sqrt{T}}$$ where $N$ is the standard normal distribution function, $F=Se^{(r-q)T}$ is the forward index price, $S$ is the spot index price, $K$ is the strike price, $T$ is the time to expiration and $\sigma$ is the implied volatility.

Here are some current values

$$S = 1942, r = 0.25\%, q = 1.97\%.$$

For the 14 Aug 1950 call

$$K = 1950, T = 64 \ \text{days}=0.1752 \ \text{years} ,$$

and assuming an implied volatility of $\sigma = 12\%$, the binary call price is $0.43$.

So the quotes you are showing look reasonable under the current implied volatility conditions.

In terms of your general question about finding implied volatility, there are two issues. (1) How to build a no-arbitrage pricing model that will correctly match market prices of vanilla calls and puts, and (2) how to price more exotic options (such as binary options) in the new framework.

In general, observed market prices of SPX index options are not consistent with simple Black-Scholes assumptions -- an underlying that follows geometric Brownian motion with constant volatility. The actual prices look like expecations under a probability distribution that is not lognormal -- perhaps more skewed. Implied volatility -- that value which makes the Black-Scholes formula match the market price -- varies both with strike price and time to expiration. In theory, if we knew the market price of a call option $C(S,t;K,T)$ for every conceivable strike price $K$ when the index price is $S$ at time $t$, then for a given time-to-expiration $T$ we could find the implied probability density function as

$$f(S) = e^{r(T-t)}\frac{\partial^2}{\partial K^2}C(S,t;K,T).$$

In practice, there are not enough market price observations to use this formula directly in a meaningful way -- but it suggests there are broader stochastic models (with more degrees of freedom) that can be used to generate no-arbitrage option prices that match market prices. One of the more popular approaches is the local volatility model that assumes the underlying index price follows a stochastic process of the form

$$dS_t=\mu S_t dt + \sigma(S_t)S_tdW_t$$

where $W_t$ is a Brownian motion and the volatility $\sigma(\cdot)$ is not a constant but a deterministic function of the underlying price. There is an extensive literature on the local volatility model indicating how to calibrate the function $\sigma(\cdot)$ to match market prices.

For a binary option, it is not entirely clear what simple pricing appoach should be used when vanilla calls and puts exhibit an implied volatility skew. One possibility is to find the price in terms of a replicating portfolio of vanilla options. If a binary option pays $1$ when the index is above a strike price $K$ then it can be replicated, in theory,approximately using a call spread. We would buy a number $1/\delta$ of ordinary calls with strike price $K$ and sell the same number of calls with strike price $K+\delta.$ In this way

$$C_d(S,t;K,T) \approx \frac1{\delta} \big[C(S,t;K,T)-C(S,t;K+\delta , T)\big]$$

Ideally we would make $\delta$ as small as possible, but there are practical limitations in terms of available strikes and the eventual leverage that would be applied. Nevertheless, this replication model suggests how the binary option might be priced in the presence of a volatility skew. Taking the limit as $\delta \rightarrow 0$ we get

$$C_d(S,t;K,T) \approx \frac{\partial}{\partial K} C(S,t;K,T),$$

and this relationship indicates how to extract the price of the binary option that is consistent with the prices of vanilla options in a framework (eg. local volatility) where implied volatility depends on strike.

labels - Login page & user parameters page: "password" field VS. "passphrase" field

For a secure application, we push users to use passphrases instead of passwords. We've got some explanations in the password change page. For the field, we use the label "passphrase" to push again the user to use some.

One user wondered if people will get confused about what the “passphrase” might be.

Are those concerns real, should we really switch back to "password", or is "passphrase" a better option to help people change their habits?

EDIT: Maybe I've not been clear enough in my question. The question is about the labeling. We will use passphrases and OWASP rules in any cases. The question is "do we display 'password' for the field, or 'passphrase'?". Or "Will the user be confused to read 'username/passphrase' instead of 'username/password' on the login page?"

Answer

A recipe:

• 
  

  Use "passphrase". (why? - you are promoting the best practice, you may actually want to include a link to OWASP)

  
  


• 
  

  Add a nice little blurb to the right on why they would want the security that passphrases provide, and other security tips.

  
  
  


• 
  

  Use xkcd's "correct horse battery staple" cartoon, but disallow this passphrase.

  
  

Note: XKCD cartoons are licensed under a Creative Commons Attribution-NonCommercial 2.5 License.

website design - Should a button become lighter or darker on hover?

We're having a discussion in the office about whether a button should become lighter or darker when a user hovers over it.

Here are some examples from the field:

Apple "Buy Now" button (Second is hover, third is depressed) - http://www.apple.com/iphone/

Twitter Bootstrap - http://twitter.github.com/bootstrap/

(Unselected)

(Hover)

Github homepage - github.com

The button on FogBugz homepage goes from yellow to slightly lighter yellow. The buttons on Optimizely and Visual Website Optimizer hardly change.

Amazon's "Buy Now" button doesn't do anything when you hover over it (besides change to a pointer cursor). The colored buttons in Google's new interface (see Gmail or Calendar) go slightly darker when you hover over them.

Finally here is our button:

Should your button become lighter or darker when you hover over it? What else should you consider? Does anyone have data on whether the hover effect matters for conversions?

Answer

There isn't any pattern common enough to be considered "normal" for this by most people, so it doesn't matter which you choose as long as it makes sense for your application.

The important thing isn't whether it gets darker or lighter on hover. It is that there is some change. Someone using a site isn't going to say "that changed to dark on hover instead of light, so it must be something else".

The change is there simply to let you know that it is clickable in addition to any cursor change. Exactly what change that is, is more of a design or aesthetic question than a usability one.

simulations - Does GARCH derived variance explain the autocorrelation in a time series?

Given a time series $u_i$ of returns (where $i=1,\dotsc,t$), $\sigma_i$ is calculated from GARCH(1,1) as $$ \sigma_i^2=\omega+\alpha u_{i-1}^2 +\beta \sigma_{i-1}^2. $$ What is the mathematical basis to say that $u_i^2/\sigma_i^2$ will exhibit little autocorrelation in the series?

Hull's book "Options, Futures and Other Derivatives" is an excellent reference. In 6th ed. p. 470, "How Good is the Model?" he states that

If a GARCH model is working well, it should remove the autocorrelation. We can test whether it has done so by considering the autocorrelation structure for the variables $u_i^2/\sigma_i^2$. If these show very little autocorrelation our model for $\sigma_i$ has succeeded in explaining autocorrelation in the $u_i^2$.

Maximum likelihood estimation for variance ends with maximizing $$ -m \space \ln(v) -\sum_{i=1}^{t} u_i^2/v_i $$ where $v_i$ is variance = $\sigma_i^2$.
This function does not really mean $u_i^2/v_i$ being minimized, because $-\ln(v_i)$ gets larger and so does $u_i^2/v_i$ as $v_i$ gets smaller. However, it makes intuitive sense that dividing $u_t$ return by its (instant or regime) volatility explains away volatility-related component of the time series. I am looking for a mathematical or logical explanation of this.

I think Hull is not very accurate here as the time series may have trends etc.; also, there are better approaches to finding i.i.d. from the times series than using $u_i^2/\sigma_i^2$ alone. I particularly like Filtering Historical Simulation- Backtest Analysis by Barone-Adesi (2000).

how can i disable gray shape beside cursor on illustrator cc 2019?

when working on the illustrator document this cursor(gray) shape is always emerged

how can i disable it?

usability - Default filtering behavior: Everything displayed or everything hidden?

We have a selection field on our website. And today we had a discussion at the office about our filter options when the user is facing the filter options for the first time.

Option A

No filters are active. All results will be shown.

Option B

All filters are active. All results will be shown (because no filter is active).

Which option will you recommend?